AbstractThe contribution of this paper is threefold. First, it proposes general specifications for export and import functions that encompass the contributions of both Kaldorian and Schumpeterian literatures on the determinants of trade performance. Second, the paper provides evidence of the impact of nonprice competitiveness, measured by the growth of relative economic efficiency on export and import growth in different technological sectors. Third, it shows that the magnitude of income elasticities of demand is partially determined by relative economic efficiency.