IDEAS home Printed from https://ideas.repec.org/a/taf/intecj/v30y2016i1p1-18.html
   My bibliography  Save this article

Competitive and Comparative Advantage: Towards a Unified Theory of International Trade

Author

Listed:
  • Bernard C. Beaudreau

Abstract

The field of international business/economics is largely dualistic in nature. On one hand is the economics literature which has, for two centuries, focused on the notion of comparative advantage (technology, factor proportions) while on the other is the business literature which has recently developed the concept of competitive advantage. This paper presents a reconciliation of the two based on global value chain/supply chain analysis and the concept of vertical comparative advantage. It is shown that the theory of competitive advantage's epistemological comparative advantage lies with its ‘how to’ approach to developing an advantage, while the theory of comparative advantage's epistemological comparative advantage lies with its account of ‘what is’ and that both are complementary. However, it is also argued that the failure to recognize this complementarity as well as the shortcomings of each have prevented and continue to prevent the emergence of an integrated, empirically-consistent theory of international trade -- in short, prevented us from taking advantage of the gains from epistemological trade.

Suggested Citation

  • Bernard C. Beaudreau, 2016. "Competitive and Comparative Advantage: Towards a Unified Theory of International Trade," International Economic Journal, Taylor & Francis Journals, vol. 30(1), pages 1-18, March.
    • Handle: RePEc:taf:intecj:v:30:y:2016:i:1:p:1-18
    DOI: 10.1080/10168737.2015.1136664
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/10168737.2015.1136664
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/10168737.2015.1136664?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. J. Peter Neary, 2003. "Competitive versus Comparative Advantage," The World Economy, Wiley Blackwell, vol. 26(4), pages 457-470, April.
    2. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
    3. Thomas C. Powell, 2001. "Competitive advantage: logical and philosophical considerations," Strategic Management Journal, Wiley Blackwell, vol. 22(9), pages 875-888, September.
    4. Andrew B. Bernard & Stephen J. Redding & Peter K. Schott, 2007. "Comparative Advantage and Heterogeneous Firms," Review of Economic Studies, Oxford University Press, vol. 74(1), pages 31-66.
    5. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
    6. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    7. Reimer, Jeffrey J., 2006. "Global production sharing and trade in the services of factors," Journal of International Economics, Elsevier, vol. 68(2), pages 384-408, March.
    8. Helpman, Elhanan, 1984. "A Simple Theory of International Trade with Multinational Corporations," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 451-471, June.
    9. Bernard C. Beaudreau, 2013. "What the OECD-WTO TiVA Data Tell Us about Comparative Advantage and International Trade in General," The International Trade Journal, Taylor & Francis Journals, vol. 27(5), pages 465-481, December.
    10. Susan Chun Zhu & Daniel Trefler, 2000. "Beyond the Algebra of Explanation: HOV for the Technology Age," American Economic Review, American Economic Association, vol. 90(2), pages 145-149, May.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Ramadhanty, Shafitri Arindya, 2020. "Comparative Advantage as a Bargaining Chip in Global Value Chain: Indonesia Rattan Industry," OSF Preprints 8e9h5, Center for Open Science.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Elhanan Helpman, 2014. "Foreign Trade and Investment: Firm-level Perspectives," Economica, London School of Economics and Political Science, vol. 81(321), pages 1-14, January.
    2. Alessandro Borin & Riccardo Cristadoro, 2014. "Foreign direct investment and multinational firms," Questioni di Economia e Finanza (Occasional Papers) 243, Bank of Italy, Economic Research and International Relations Area.
    3. Olivier Cadot & Céline Carrère & Vanessa Strauss-Kahn, 2013. "Trade Diversification, Income, And Growth: What Do We Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 27(4), pages 790-812, September.
    4. Johannes Pöschl & Robert Stehrer & Roman Stöllinger, 2010. "Austrian Exporters: A Firm-Level Analysis," wiiw Working Papers 67, The Vienna Institute for International Economic Studies, wiiw.
    5. Paolo Epifani, 2003. "Trade liberalization, Firm Performances and Labor Market Outcomes in the Developing World, what Can We Learn From Micro-Level Data?," Rivista italiana degli economisti, Società editrice il Mulino, issue 3, pages 455-486.
    6. Kristian Behrens & Giordano Mion & Yasusada Murata & Jens Südekum, 2014. "Trade, Wages, And Productivity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(4), pages 1305-1348, November.
    7. Carlo Perroni & Davide Suverato, 2023. "Skills scarcity and export intensity," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(2), pages 719-757, May.
    8. Melitz, Marc J. & Redding, Stephen J., 2014. "Heterogeneous Firms and Trade," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 1-54, Elsevier.
    9. Antrà s, Pol & Yeaple, Stephen R., 2014. "Multinational Firms and the Structure of International Trade," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 55-130, Elsevier.
    10. Zhihong Yu, 2012. "Openness, managerial incentives, and heterogeneous firms," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 51(1), pages 71-104, September.
    11. Kasahara, Hiroyuki & Lapham, Beverly, 2013. "Productivity and the decision to import and export: Theory and evidence," Journal of International Economics, Elsevier, vol. 89(2), pages 297-316.
    12. Roberto Álvarez & Ricardo López, 2012. "Trade Liberalization and Industry Dynamics," Open Economies Review, Springer, vol. 23(4), pages 579-595, September.
    13. Dosi, Giovanni & Grazzi, Marco & Moschella, Daniele, 2015. "Technology and costs in international competitiveness: From countries and sectors to firms," Research Policy, Elsevier, vol. 44(10), pages 1795-1814.
    14. Luca Fontanelli, 2023. "Theories of market selection: a survey," LEM Papers Series 2023/22, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    15. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2018. "Global Firms," Journal of Economic Literature, American Economic Association, vol. 56(2), pages 565-619, June.
    16. Larch Mario & Lechthaler Wolfgang, 2011. "Comparative Advantage and Skill-Specific Unemployment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-58, April.
    17. Lucian Cernat, 2016. "Toward “Trade Policy Analysis 2.0”: From National Comparative Advantage to Firm-Level Trade Data," ADB Institute Series on Development Economics, in: Ganeshan Wignaraja (ed.), Production Networks and Enterprises in East Asia, edition 1, chapter 0, pages 21-31, Springer.
    18. Arezki, Rabah & Fetzer, Thiemo & Pisch, Frank, 2017. "On the comparative advantage of U.S. manufacturing: Evidence from the shale gas revolution," Journal of International Economics, Elsevier, vol. 107(C), pages 34-59.
    19. Gabriel J. Felbermayr & Mario Larch & Wolfgang Lechthaler, 2013. "Unemployment in an Interdependent World," American Economic Journal: Economic Policy, American Economic Association, vol. 5(1), pages 262-301, February.
    20. Beverly Lapham & Hiroyuki Kasahara, 2005. "Import Protection as Export Destruction," 2005 Meeting Papers 528, Society for Economic Dynamics.

    More about this item

    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:taf:intecj:v:30:y:2016:i:1:p:1-18. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RIEJ20 .

    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.