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Analysing Comparative Advantage and Competitiveness: An Application to Australia's Textile and Clothing Industries

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  • Inka Havrila
  • Pemasiri Gunawardana

Abstract

Australia's comparative advantage and competitiveness in textile and clothing (TAC) industries are analysed, using Balassa's revealed comparative advantage index and Vollrath's measures of competitiveness. The analysis based on Balassa's indices shows that Australia has a strong comparative disadvantage in textiles and clothing as aggregate commodity groups, but there is comparative advantage in sub–categories of ‘special textile products’, ‘floor coverage, tapestry etc’, and ‘fur clothing’. The analysis based on Vollrath's indices shows that Australia is not competitive in the world market with respect to aggregate commodity groups of textiles and clothing. Grubel–Loyd index of intra–industry trade was calculated for seven categories of textiles and two categories of clothing. The results show a rising trend in intra–industry trade in some of these categories of TAC products, implying that Australia increasingly exports and imports differentiated TAC products. Australian TAC industries may look to further promote exports of their products in the global market through increased product differentiation and improved quality and design.

Suggested Citation

  • Inka Havrila & Pemasiri Gunawardana, 2003. "Analysing Comparative Advantage and Competitiveness: An Application to Australia's Textile and Clothing Industries," Australian Economic Papers, Wiley Blackwell, vol. 42(1), pages 103-117, March.
    • Handle: RePEc:bla:ausecp:v:42:y:2003:i:1:p:103-117
    DOI: 10.1111/1467-8454.00189
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    Cited by:

    1. Pavel Zdražil & Ivana Kraftová, 2022. "The Determinants of Competitive Advantage for Europe’s Regions: Digital Economy at the Start of the Fourth Industrial Revolution," Journal of Economics / Ekonomicky casopis, Institute of Economic Research, Slovak Academy of Sciences, vol. 70(5), pages 450-471, May.
    2. Junning Cai & PingSun Leung, 2008. "Towards a more general measure of revealed comparative advantage variation," Applied Economics Letters, Taylor & Francis Journals, vol. 15(9), pages 723-726.
    3. Banterle, Alessandro & Carraresi, Laura, 2006. "International trade and competitiveness analysis in the European Union: the case of prepared meat sector," 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece 10058, European Association of Agricultural Economists.
    4. Hoang, Viet Van & Tran, Khai Tien & Tu, Binh Van, 2017. "Assessing the Agricultural Competitive Advantage by the RTA index: A Case Study in Vietnam," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 9(3), September.
    5. Carraresi, Laura & Banterle, Alessandro, 2015. "Agri-food Competitive Performance in EU Countries: A Fifteen-Year Retrospective," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 18(2), pages 1-26, May.
    6. repec:zbw:hohpro:338 is not listed on IDEAS
    7. Piotr Bórawski & Aneta Bełdycka-Bórawska & Andrzej Parzonko & Tomasz Rokicki & Lisa Holden, 2022. "Changes in the comparative advantage of Polish dairy products," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 68(12), pages 464-475.
    8. Maria CRESCIMANNO & Antonino GALATI & Tufan BAL, 2014. "The role of the economic crisis on the competitiveness of the agri-food sector in the main Mediterranean countries," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 60(2), pages 49-64.
    9. Yaya Sissoko & David Yerger, 2010. "West Africa’s Evolving Competitive Exposure in U.S. Import Markets," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 16(1), pages 11-23, February.
    10. Banterle, Alessandro, 2005. "Competitiveness and Agri-food Trade: An Empirical Analysis in the European Union," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24692, European Association of Agricultural Economists.
    11. repec:old:wpaper:338 is not listed on IDEAS
    12. Jean-Raphael Chaponniere & Jean-Pierre Cling, 2009. "Vietnam's Export-Led Growth Model and Competition with China," Economie Internationale, CEPII research center, issue 118, pages 101-130.
    13. Christoph Böhringer & Victoria Alexeeva-Talebi, 2011. "Unilateral climate policy and competitiveness: The implications of differential emission pricing," Working Papers V-338-11, University of Oldenburg, Department of Economics, revised Jun 2011.
    14. McDonald, Daniel & Nair, Roneel & Rodriguez, Gil & Buetre, Benjamin L., 2005. "Trade flows between Australia and China: An opportunity for a free trade agreement," 2005 Conference (49th), February 9-11, 2005, Coff's Harbour, Australia 137935, Australian Agricultural and Resource Economics Society.
    15. Carraresi, Laura & Banterle, Alessandro, 2008. "Measuring competitiveness in the EU market: a comparison between food industry and agriculture," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43692, European Association of Agricultural Economists.
    16. Mohammad Ali Feizpour & Abolfazl Shahmohammadi Mehrjardi, 2014. "Comparative Advantages and Sustainable Development in Iranian Manufacturing Industries," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 18(1), pages 33-52, Winter.

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