IDEAS home Printed from https://ideas.repec.org/p/oec/traaab/121-en.html
   My bibliography  Save this paper

Comparative Advantage and Trade Performance: Policy Implications

Author

Listed:
  • Przemyslaw Kowalski

    (OECD)

Abstract

This paper builds on recent generalisations of theory and empirics of comparative advantage and establishes the relative importance of different sources of comparative advantage in explaining trade, with particular focus on policy and institutional factors. The broad policy and institutional areas posited as determinants of comparative advantage in this paper include: physical capital, human capital (distinguishing between secondary, tertiary education and average years of schooling), financial development, energy supply, business climate, labour market institutions as well as import tariff policy. The empirical investigation is performed for bilateral trade of 55 OECD and selected emerging market (SEM) economies and 44 manufacturing sectors covering the entirety of merchandise trade. Our results show that comparative advantage remains an important determinant of trade and that it has changed over time, including as a result of changing policies and institutions. The policy and institutional areas shown to be important determinants of comparative advantage include physical and human capital accumulation (especially secondary and tertiary education), financial development, the business climate, as well as a number of aspects of labour market institutions. The results suggest also that comparative advantage has been — and is likely to be in the future — relatively more important for North-South and South-South trade. Overall, the results underscore the importance of a comprehensive approach to designing economic development policies, which should seek consistency between trade and other policy objectives.

Suggested Citation

  • Przemyslaw Kowalski, 2011. "Comparative Advantage and Trade Performance: Policy Implications," OECD Trade Policy Papers 121, OECD Publishing.
    • Handle: RePEc:oec:traaab:121-en
    DOI: 10.1787/5kg3vwb8g0hl-en
    as

    Download full text from publisher

    File URL: https://doi.org/10.1787/5kg3vwb8g0hl-en
    Download Restriction: no
    File URL: https://libkey.io/10.1787/5kg3vwb8g0hl-en?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hailay Gebretinsae Beyene, 2014. "Trade Integration and Revealed Comparative Advantages of Sub-Saharan Africa and South Asian Merchandize Export," Foreign Trade Review, , vol. 49(2), pages 163-176, May.
    2. Reinhard Schumacher, 2013. "Deconstructing the Theory of Comparative Advantage," World Economic Review, World Economics Association, vol. 2013(2), pages 1-83, February.
    3. Rusali, Mirela, 2013. "Eu Accession Impacts On The Comparative Advantages In Agricultural Trade: Romania’S Case," Economics of Agriculture, Institute of Agricultural Economics, vol. 59(4), pages 1-6, January.
    4. Åsa Johansson & Eduardo Olaberría, 2014. "Long-term Patterns of Trade and Specialisation," OECD Economics Department Working Papers 1136, OECD Publishing.
    5. Jagadambe, Subhash, 2016. "Analysis of export competitiveness of Indian agricultural products with ASEAN countries," Working Papers 356, Institute for Social and Economic Change, Bangalore.
    6. Åsa Johansson & Eduardo Olaberría, 2014. "Global Trade and Specialisation Patterns Over the Next 50 Years," OECD Economic Policy Papers 10, OECD Publishing.
    7. Naoki Sekiguchi, 2022. "The evolution of non-OECD countries in the twenty-first century: developments in steel trade and the role of technology," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 35(1), pages 103-132, March.

    More about this item

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oec:traaab:121-en. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/tdoecfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.