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

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  • Daniela Marconi

    ()
    (Bank of Italy, Economic Research Department)

  • Valeria Rolli

    ()
    (Bank of Italy, Economic Research epartment)

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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Bibliographic Info

Paper provided by Bank of Italy, Economic Research and International Relations Area 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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Keywords: Revealed comparative advantages; technological up-grading;

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Cited by:
  1. Ivan Savin & Peter Winker, 2009. "Forecasting Russian Foreign Trade Comparative Advantages in the Context of a Potential WTO Accession," MAGKS Papers on Economics 200914, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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