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Revealing Comparative Advantage: Chaotic or Coherent Patterns Across Time and Sector and U.S. Trading Partner?

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  • J. David Richardson
  • Chi Zhang
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    Abstract

    We map United States comparative advantage between 1980 and 1995, by trading partner and region, using Balassa's export-based index of Revealed Comparative Advantage (RCA). We find: temporally stable and ubiquitous US comparative advantage in differentiated producer goods (except disadvantage in Japan); somewhat less stable and less sweeping US disadvantage in standardized producer goods; chaotic and diverse patterns of US RCA in consumer goods (especially in the Chinese market). Our most significant findings are surprisingly sharp geographical differences in patterns of US RCA and surprisingly small differences across sub-sectors of 1, 2, and 3-digit SITC classifications - regional, but not sectoral, niche' specialization. The high overall variability across regions in RCA indexes seems unrelated to obvious explanations such as proximity or lingual/historical ties to the US. In producer goods, RCA variability across regions correlates somewhat better with accounts of trade diversion and of regional preferences for and discrimination against US exports. We find only scant evidence of high or increasing variability across disaggregated commodity sub-groups in US RCA indexes. Such variability is often the prediction of theories of comparative advantage that are based on vertical specialization, product differentiation, or scale and agglomeration economies.

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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7212.

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    Date of creation: Jul 1999
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    Publication status: published as J. David Richardson & Chi Zhang, 2001. "Revealing Comparative Advantage: Chaotic or Coherent Patterns across Time and Sector and U.S. Trading Partner?," NBER Chapters, in: Topics in Empirical International Economics: A Festschrift in Honor of Robert E. Lipsey, pages 195-232 National Bureau of Economic Research, Inc.
    Handle: RePEc:nbr:nberwo:7212

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    1. Irving B. Kravis & Robert E. Lipsey, 1971. "Price Competitiveness in World Trade," NBER Books, National Bureau of Economic Research, Inc, number krav71-1, October.
    2. Arye Hillman, 1980. "Observations on the relation between “revealed comparative advantage” and comparative advantage as indicated by pre-trade relative prices," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 116(2), pages 315-321, June.
    3. Hoekman, Bernard & Djankov, Simeon, 1997. "Determinants of the Export Structure of Countries in Central and Eastern Europe," World Bank Economic Review, World Bank Group, vol. 11(3), pages 471-87, September.
    4. Milka S. Kirova & Robert E. Lipsey, 1998. "Measuring real investment: trends in the United States and international comparisons," Review, Federal Reserve Bank of St. Louis, issue Jan, pages 3-18.
    5. Bernard, Andrew & Jensen, J Bradford & Redding, Stephen J & Schott, Peter, 2007. "Firms in International Trade," CEPR Discussion Papers 6277, C.E.P.R. Discussion Papers.
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    7. Alan Heston & Robert E. Lipsey, 1999. "International and Interarea Comparisons of Income, Output, and Prices," NBER Books, National Bureau of Economic Research, Inc, number hest99-1, October.
    8. Marcus Noland & Bela Balassa, 1988. "Japan in the World Economy," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 0412.
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    Cited by:
    1. Dudley, Leonard & Moenius, Johannes, 2007. "The great realignment: How factor-biased innovation reshaped comparative advantage in the U.S. and Japan, 1970-1992," Japan and the World Economy, Elsevier, vol. 19(1), pages 112-132, January.
    2. Ardelean, Adina & Lugovskyy, Volodymyr, 2010. "Domestic productivity and variety gains from trade," Journal of International Economics, Elsevier, vol. 80(2), pages 280-291, March.
    3. Henri de Groot & Jessie Bakens, 2007. "Globalisation and the Dutch economy; a case study to the influence of the emergence of China and Eastern Europe on Dutch international trade," CPB Discussion Paper 89, CPB Netherlands Bureau for Economic Policy Analysis.
    4. Amador, João & Cabral, Sónia & Ramos Maria, José, 2007. "International Trade Patterns over the Last Four Decades: How does Portugal Compare with other Cohesion Countries?," MPRA Paper 5996, University Library of Munich, Germany.
    5. Vinokurov, Evgeny, 2007. "L’enclave russe de Kaliningrad : spécificité territoriale et intégration à l’économie mondiale
      [The Russian Enclave of Kaliningrad: Territorial Specificity and Integration with the World E
      ," MPRA Paper 20939, University Library of Munich, Germany.
    6. DUDLEY, Leonard & MOENIUS, Johannes, 2003. "Directed Technical Change and International Trade," Cahiers de recherche 2003-18, Universite de Montreal, Departement de sciences economiques.
    7. Vinokurov, Evgeny, 2007. "Kaliningrad: Enclaves and Economic Integration," MPRA Paper 20937, University Library of Munich, Germany.
    8. Colin Carter & Xianghong Li, 2004. "Changing trade patterns in major OECD countries," Applied Economics, Taylor & Francis Journals, vol. 36(14), pages 1501-1511.
    9. Elsa Leromain & Gianluca Orefice, 2013. "New Revealed Comparative Advantage Index: Dataset and Empirical Distribution," Working Papers 2013-20, CEPII research center.

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