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Comparative advantage patterns and domestic determinants in emerging countries: an analysis with a focus on technology

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Author Info
Daniela Marconi () (Bank of Italy, Economic Research Department)
Valeria Rolli () (Bank of Italy, Economic Research epartment)

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Abstract

During the last two decades a number of emerging economies have become deeply engaged in technology-intensive production. This has been reflected in a shift in their international trade specialization from labor-intensive towards capital-intensive goods and in rapid productivity gains across all manufacturing activities. The paper draws on a sample of sixteen emerging countries to investigate the linkages between the pattern of revealed comparative advantages (RCAs), captured by a modified version of the Lafay index of international trade specialization, and the competitiveness structure of the domestic manufacturing sector, measured by a set of industry and country-specific variables. Positive and large RCAs are found to be associated with low unit labor costs in both low-technology (labor-intensive) and medium-or-high tech sectors; on the other hand, domestic accumulation of physical capital is associated with positive and large RCAs in medium-or-high tech sectors. The international disadvantage (negative RCAs) in technology-intensive production tends to increase for countries with low human capital, whereas it diminishes for countries that have large domestic markets and import technology through foreign capital goods.

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Paper provided by Bank of Italy, Economic Research Department in its series Temi di discussione (Economic working papers) with number 638.

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Date of creation: Sep 2007
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Handle: RePEc:bdi:wptemi:td_638_07

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Related research
Keywords: Revealed comparative advantages; technological up-grading;

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Find related papers by JEL classification:
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General

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  5. Landesmann, Michael A. & Stehrer, Robert, 2001. "Convergence patterns and switchovers in comparative advantage," Structural Change and Economic Dynamics, Elsevier, vol. 12(4), pages 399-423, December. [Downloadable!] (restricted)
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  7. Barry P. Bosworth & Susan M. Collins and Georgetown University, 2003. "The Empirics of Growth: An Update," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(2003-2), pages 113-206. [Downloadable!]
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  11. Robert Stehrer & Julia Wörz, 2003. "Technological convergence and trade patterns," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 139(2), pages 191-219, June. [Downloadable!] (restricted)
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