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Empirical Relevance of the Hillman Condition for Revealed Comparative Advantage: 10 Stylized Facts

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  • Jeroen Hinloopen

    ()

  • Charles van Marrewijk

    ()

Abstract

The theoretically necessary and sufficient condition for the correspondence between `revealed'comparative advantage and pre-trade relative prices derived by Hillman (1980) is analyzed empricially for virtually all countries of the world over an extended period of time. This yields 10 stylized facts, including that (i) violations of the Hillman condition are small as a share of the number of observations, but quite substantial as a share of the value of world exports, (ii) violations occur relatively frequent in the period 1970 ­ 1984 while they hardly ever occur in the period 1985 ­ 1997, and (iii) violations occur foremost in primary product and natural-resource intensive sectors, for sectors in countries in Africa, the Middle East, Latin America, and Eastern Europe. The condition appears also to be useful for identifying erroneous trade flow classifications.

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Bibliographic Info

Paper provided by Utrecht School of Economics in its series Working Papers with number 05-24.

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Length: 25 pages
Date of creation: Feb 2005
Date of revision:
Handle: RePEc:use:tkiwps:0524

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Keywords: Balassa index; Hillman condition; comparative advantage;

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References

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  1. Jeroen Hinloopen & Charles van Marrewijk, 2004. "Dynamics of Chinese Comparative Advantage," Tinbergen Institute Discussion Papers 04-034/2, Tinbergen Institute.
  2. Štefan Bojnec, 2001. "Trade and Revealed Comparative Advantage Measures: Regional and Central and East European Agricultural Trade," Eastern European Economics, M.E. Sharpe, Inc., vol. 39(2), pages 72-98, March.
  3. Proudman, J. & Redding, S., 1998. "Evolving Patterns of International Trade," Economics Papers 144, Economics Group, Nuffield College, University of Oxford.
  4. Jeroen Hinloopen & Charles Marrewijk, 2001. "On the empirical distribution of the Balassa index," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 137(1), pages 1-35, March.
  5. Serafino Marchese & Francisco Simone, 1989. "Monotonicity of indices of “Revealed“ comparative advantage: Empirical evidence on Hillman’s condition," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 125(1), pages 158-167, March.
  6. Proudman, James & Redding, Stephen J, 1998. "Persistence and Mobility in International Trade," CEPR Discussion Papers 1802, C.E.P.R. Discussion Papers.
  7. Imre Fert– & L. J. Hubbard, 2003. "Revealed Comparative Advantage and Competitiveness in Hungarian Agri-Food Sectors," The World Economy, Wiley Blackwell, vol. 26(2), pages 247-259, 02.
  8. 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.
  9. Svaleryd, Helena & Vlachos, Jonas, 2005. "Financial markets, the pattern of industrial specialization and comparative advantage: Evidence from OECD countries," European Economic Review, Elsevier, vol. 49(1), pages 113-144, January.
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Cited by:
  1. Möllers, Judith & Zier, Patrick & Frohberg, Klaus & Buchenrieder, Gertrud & Bojnec, Štefan, 2009. "Croatia's EU accession: socio-economic assessment of farm households and policy recommendations," Studies on the Agricultural and Food Sector in Central and Eastern Europe, Leib­niz Institute of Agricultural Development in Central and Eastern Europe (IAMO), volume 48, number 53665.
  2. Klaus Frohberg & Patrick Zier & Judith Möllers & Gertrud Buchenrieder, 2010. "Croatia’s Dairy Sector—Can it Compete in the European Market?," International Advances in Economic Research, Springer, vol. 16(2), pages 223-236, May.
  3. Caleb Stroup & Benjamin Zissimos, 2013. "Social Unrest in the Wake of IMF Structural Adjustment Programs," CESifo Working Paper Series 4211, CESifo Group Munich.
  4. Jámbor, Attila, 2011. "Az agrárkereskedelem változása Magyarország és az Európai Unió között a csatlakozás után
    [The post-accession change in agricultural trading between Hungary and the EU]
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 775-791.
  5. Jámbor, Attila, 2009. "A magyar gabonafélék és feldolgozott termékeinek komparatív előnyei és versenyképessége az EU-15 országok piacain
    [The comparative advantages and competitiveness of Hungarian cereals and
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(5), pages 443-463.
  6. repec:dgr:uvatin:2008013 is not listed on IDEAS
  7. 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.
  8. C. Veeramani & Prachi Gupta, 2014. "Extensive and intensive margins of India's exports: Comparison with China," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2014-011, Indira Gandhi Institute of Development Research, Mumbai, India.
  9. Ufuk Gunes Bebek, 2011. "Monotonicity of additive indices of revealed comparative advantage," Economics Bulletin, AccessEcon, vol. 31(2), pages 1894-1901.

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