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What do Alternative Measures of Comparative Advantage Reveal about the Composition of Developing Countries' Exports?

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  • Alexander J. Yeats

    (The World Bank)

Abstract

In spite of their extensive applications in research and policy studies, no previous product level comparisons have been made between Balassa's revealed comparative advantage index (RCA) and indices which reflect the standard Hecksher-Ohlin theory of comparative advantage. This study conducts several empirical tests relating to this point for developing countries' exports of manufactured products. The results show that products in which developing countries have achieved a revealed comparative advantage are highly concentrated in a broad group of labour intensive products, while, for other items, their RCAs are generally below unity. However, within the labour intensive group developing countries failed to develop a revealed comparative advantage for about one-half of the items. A regression model suggests that natural resource availability, human, and physical capital requirements are constraining exports of these products.

Suggested Citation

  • Alexander J. Yeats, 1992. "What do Alternative Measures of Comparative Advantage Reveal about the Composition of Developing Countries' Exports?," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 27(2), pages 139-154, July.
    • Handle: RePEc:dse:indecr:v:27:y:1992:i:2:p:139-154
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    Cited by:

    1. Alam, Gazi Mahabubul & Forhad, Abdur Rahman & Ismail, Ismi Arif, 2020. "Can education as an ‘International Commodity’ be the backbone or cane of a nation in the era of fourth industrial revolution? - A Comparative study," Technological Forecasting and Social Change, Elsevier, vol. 159(C).
    2. Ross D. Weiner & Trevor Roxo & Mitchell Kellman, 2008. "South Africa's Manufactured International Trade in the Post-Sanctions Epoch: Patterns and Potentials," The American Economist, Sage Publications, vol. 52(1), pages 86-95, March.

    More about this item

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

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