scispace - formally typeset
Open AccessJournal ArticleDOI

Revealed comparative advantage: What is it good for?

TLDR
In this paper, the authors apply a widely-used class of quantitative trade models to evaluate the usefulness of measures of revealed comparative advantage (RCA) in academic and policy analyses, and find that while commonly-used indexes are generally not consistent with theoretical notions of comparative advantage, certain indexes can be usefully employed for certain tasks.
About
This article is published in Journal of International Economics.The article was published on 2017-05-01 and is currently open access. It has received 58 citations till now. The article focuses on the topics: Revealed comparative advantage & Comparative advantage.

read more

Citations
More filters
Journal ArticleDOI

Functional specialisation in trade

TL;DR: In this article, a positive correlation between GDP per capita and specialisation in R&D (fabrication) functions is documented, and the authors argue that this is needed to better understand the potential for regional development under global integration.
Journal ArticleDOI

Current and Future Challenges of the Chinese Research System.

TL;DR: In this paper, the authors assess the evolution and current situation of the Chinese research system, mainly the academic research system from 1996 to 2017, using trend analysis and the revealed comparative adva...
Journal ArticleDOI

Competitive Bioeconomy? Comparing Bio-based and Non-bio-based Primary Sectors of the World

TL;DR: In this article, a constant market share analysis based upon sectoral output data (2000-2014) shows that competition for market share was significantly lower in sector A than in sector B across 43 countries and one rest of the world country group (ROW), consisting mainly of smaller non-European economies.
Journal ArticleDOI

Does the participation in global value chains promote interregional carbon emissions transferring via trade? Evidence from 39 major economies

TL;DR: In this paper, the authors established an econometric panel data model to investigate the impact of participation in GVCs on the carbon emissions transferring via trade (CTT) in 39 major economies, and articulates relevant environmental governance policies that potentially achieve emissions reduction targets.
Journal ArticleDOI

The declining scientific wealth of Hong Kong and Singapore

TL;DR: Analysis of Hong Kong and Singapore's knowledge creation and worldwide impact over the past 20 years indicates that these two territories are struggling to keep up and are showing declining competitiveness, making them indistinguishable from others as knowledge centres.
References
More filters
Journal ArticleDOI

The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity

TL;DR: This paper developed a dynamic industry model with heterogeneous firms to analyze the intra-industry effects of international trade and showed how the exposure to trade will induce only the more productive firms to enter the export market (while some less productive firms continue to produce only for the domestic market).
Journal ArticleDOI

Gravity with Gravitas: A Solution to the Border Puzzle

TL;DR: In this article, a method that consistently and efficiently estimates a theoretical gravity equation and correctly calculates the comparative statics of trade frictions was developed to solve the famous McCallum border puzzle.
Posted Content

Scale Economies, Product Differentiation, and the Pattern of Trade

TL;DR: In this article, the authors present a simple formal analysis which incorporates these elements, and show how it can be used to shed some light on some issues which cannot be handled in more conventional models.
Journal ArticleDOI

The Log of Gravity

TL;DR: In this paper, the gravity equation for trade was used to provide new estimates of this equation, and significant differences between the estimated estimator and those obtained with the traditional method were found.
Journal ArticleDOI

Technology, Geography, and Trade

TL;DR: This article developed a Ricardian trade model that incorporates realistic geographic features into general equilibrium and delivered simple structural equations for bilateral trade with parameters relating to absolute advantage, comparative advantage, and geographic barriers.
Related Papers (5)
Frequently Asked Questions (6)
Q1. What have the authors contributed in "Revealed comparative advantage: what is it good for?" ?

This paper utilizes a many-country, many-product Ricardian trade model to evaluate the usefulness of measures of revealed comparative advantage ( RCA ) in academic and policy analyses. 

the key assumptions that are needed for the use an RCA index to be appropriate at all: trade barriers that can be separated into bilateral and product- and market-specific components and an elasticity of product-level trade flows to exporters’ production and trade costs that is constant across products, both of which indicate that RCA measures can be most appropriately utilized to study patterns of comparative advantage within somewhat narrowly defined sectors. 

The degree of dispersion in productivity across varieties of k is governed by θ > 1, with a larger value of θ implying a lower variance. 

where ci is the overall cost of a bundle of production inputs in i, d k ni ≥ 1 is an “iceberg” trade cost, and Zki (ω) is the productivity with which inputs can be turned into units of variety (k, ω) in i.Similar to Eaton and Kortum (2002), Zki (ω) is distributed according toF ki (z) = e −Tki z−θ . 

RCA indexes have also been employed in analyses of technological change over time, for example in Proudman and Redding (2000) and Bahar et al. (2014). 

The MBI is able to isolate the effect of relative productivity on trade flows by comparing bilateral trade flows for a given product to trade flows from other countries of the same product to the same market (removing product- and market-specific effects of trade distortions) and to trade flows from the same country of other products (removing bilateral effects of trade distortions).