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The granular and fundamental components of export specialization

Listed author(s):
  • Juan de Lucio

    (Universidad Nebrija. Calle de Santa Cruz de Marcenado, 27, 28015, Madrid (Spain).)

  • Raúl Mínguez

    (Universidad Nebrija. Calle de Santa Cruz de Marcenado, 27, 28015, Madrid (Spain).)

  • Asier Minondo

    (Deusto Business School, University of Deusto, Camino de Mundaiz 50, 20012 Donostia - San Sebastián (Spain). Research aliate of Instituto Complutense de Estudios Internacionales.)

  • Francisco Requena

    (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)

Countries' export specialization patterns are often caused by the behavior of very few firms. We propose an easy-to-implement methodology to decompose export specialization into fundamental comparative advantage (a country-specific component) and granular comparative advantage (a firm-specific component). We apply this methodology to analyze export specialization across countries and across regions within a country. In the country-level analysis, we find that, on average, granular comparative advantage leads to export specialization in 29% of industries, which account for 47% of total exports. We also show that 60% of the variation in export specialization across countries is explained by granular comparative advantage. The contribution of firms to export specialization is more important across regions within a country than across countries.

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File URL: ftp://147.156.210.157/RePEc/pdf/eec_1704.pdf
File Function: First version, 2017
Download Restriction: no

Paper provided by Department of Applied Economics II, Universidad de Valencia in its series Working Papers with number 1704.

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Date of creation: Apr 2017
Handle: RePEc:eec:wpaper:1704
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  1. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2007. "Firms in International Trade," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 105-130, Summer.
  2. Silviano Esteve-Pérez & Francisco Requena-Silvente & Vicente J. Pallardó-Lopez, 2013. "The Duration Of Firm-Destination Export Relationships: Evidence From Spain, 1997–2006," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 159-180, January.
  3. Francisco Requena & Andrés Artal & Juana Castillo, 2008. "Testing Heckscher— Ohlin—Vanek Model Using Spanish Regional Data," International Regional Science Review, , vol. 31(2), pages 159-184, April.
  4. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-1721, September.
  5. 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.
  6. repec:bla:kyklos:v:70:y:2017:i:3:p:425-455 is not listed on IDEAS
  7. Holger Görg & Richard Kneller & Balázs Muraközy, 2012. "What makes a successful export? Evidence from firm-product-level data," Canadian Journal of Economics, Canadian Economics Association, vol. 45(4), pages 1332-1368, November.
  8. Keith Head & Thierry Mayer & Mathias Thoenig, 2014. "Welfare and Trade without Pareto," American Economic Review, American Economic Association, vol. 104(5), pages 310-316, May.
  9. Costas Arkolakis & Arnaud Costinot & Andres Rodriguez-Clare, 2012. "New Trade Models, Same Old Gains?," American Economic Review, American Economic Association, vol. 102(1), pages 94-130, February.
  10. A. Kerem Co?ar & Pablo D. Fajgelbaum, 2016. "Internal Geography, International Trade, and Regional Specialization," American Economic Journal: Microeconomics, American Economic Association, vol. 8(1), pages 24-56, February.
  11. Nigai, Sergey, 2017. "A tale of two tails: Productivity distribution and the gains from trade," Journal of International Economics, Elsevier, vol. 104(C), pages 44-62.
  12. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 441-487.
  13. Albornoz, Facundo & Fanelli, Sebastián & Hallak, Juan Carlos, 2016. "Survival in export markets," Journal of International Economics, Elsevier, vol. 102(C), pages 262-281.
  14. Cadot, Olivier & Iacovone, Leonardo & Pierola, Martha Denisse & Rauch, Ferdinand, 2013. "Success and failure of African exporters," Journal of Development Economics, Elsevier, vol. 101(C), pages 284-296.
  15. repec:spr:series:v:8:y:2017:i:3:d:10.1007_s13209-017-0157-x is not listed on IDEAS
  16. Pierre-Philippe Combes & Miren Lafourcade, 2005. "Transport costs: measures, determinants, and regional policy implications for France," Journal of Economic Geography, Oxford University Press, vol. 5(3), pages 319-349, June.
  17. 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.
  18. Artal-Tur, Andrés & Castillo-Giménez, Juana & Llano-Verduras, Carlos & Requena-Silvente, Francisco, 2011. "The factor content of regional bilateral trade: The role of technology and demand," International Review of Economics & Finance, Elsevier, vol. 20(2), pages 157-172, April.
  19. Courant, Paul N & Deardorff, Alan V, 1992. "International Trade with Lumpy Countries," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 198-210, February.
  20. Jonathan Eaton & Samuel S. Kortum & Sebastian Sotelo, 2012. "International Trade: Linking Micro and Macro," NBER Working Papers 17864, National Bureau of Economic Research, Inc.
  21. Arnaud Costinot & Dave Donaldson & Ivana Komunjer, 2012. "What Goods Do Countries Trade? A Quantitative Exploration of Ricardo's Ideas," Review of Economic Studies, Oxford University Press, vol. 79(2), pages 581-608.
  22. Juan Lucio & Raúl Mínguez & Asier Minondo & Francisco Requena, 2017. "The granularity of Spanish exports," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 8(3), pages 225-259, August.
  23. Caroline Freund & Martha Denisse Pierola, 2015. "Export Superstars," The Review of Economics and Statistics, MIT Press, vol. 97(5), pages 1023-1032, December.
  24. David Hummels & Volodymyr Lugovskyy, 2006. "Are Matched Partner Trade Statistics a Usable Measure of Transportation Costs?," Review of International Economics, Wiley Blackwell, vol. 14(1), pages 69-86, February.
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