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The Changing Trade and Revealed Comparative Advantages of Asian and Latin American Manufacture Exports

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  • Siegfried Bender
  • Kui-Wai Li

Abstract

Changes in comparative advantage should reflect changes in factor endowment, but increasingly, changes in trade policies also affect a region's trade performance. Based on the arguments in Balassa's stages of comparative advantage thesis, this paper looks at the performance of manufacture exports in a number of Asian and Latin American economies over the period 1981-1997 and examines the revealed comparative advantage indices between economies in East Asia, Southeast Asia and Latin America. Although the RCA measurement may not distinguish between the factor endowment effects from the trade policy effect, we argue that RCA measures provide indication on the movement in a region's comparative advantage. The evidence strongly suggests that despite the strong export performance experienced by East Asian economies, they are losing their comparative advantage to the lower-tier economies in Southeast Asia and Latin America.

Suggested Citation

  • Siegfried Bender & Kui-Wai Li, 2002. "The Changing Trade and Revealed Comparative Advantages of Asian and Latin American Manufacture Exports," Working Papers 843, Economic Growth Center, Yale University.
    • Handle: RePEc:egc:wpaper:843
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    File URL: http://www.econ.yale.edu/growth_pdf/cdp843.pdf
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    References listed on IDEAS

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    1. Young Lee, 1986. "Changing export patterns in Korea, Taiwan and Japan," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 122(1), pages 150-163, March.
    2. Balassa, Bela, 1979. "The Changing Pattern of Comparative Advantage in Manufactured Goods," The Review of Economics and Statistics, MIT Press, vol. 61(2), pages 259-266, May.
    3. Jeffrey J. Schott, 1994. "Uruguay Round: An Assessment," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 64, January.
    4. Carolan, Terrie & Singh, Nirvikar & Talati, Cyrus, 1998. "The composition of U.S.-East Asia trade and changing comparative advantage," Journal of Development Economics, Elsevier, vol. 57(2), pages 361-389.
    5. Balassa, Bela, 1986. "Comparative Advantage in Manufactured Goods: A Reappraisal," The Review of Economics and Statistics, MIT Press, vol. 68(2), pages 315-319, May.
    6. Thomas Vollrath, 1991. "A theoretical evaluation of alternative trade intensity measures of revealed comparative advantage," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 127(2), pages 265-280, June.
    7. Amable, Bruno, 2000. "International specialisation and growth," Structural Change and Economic Dynamics, Elsevier, vol. 11(4), pages 413-431, December.
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    Citations

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    Cited by:

    1. Waqar Akhtar & M. Sharif & Hassnain Shah, 2009. "Competitiveness of Pakistani Fruits in the World Market," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 14(2), pages 125-133, Jul-Dec.
    2. Sarath Chandran, B.P., 2010. "Trade Compatibility Between India And Asean Countries," MPRA Paper 33138, University Library of Munich, Germany.
    3. Mansoor Maitah & Elena Kuzmenko & Lubos Smutka, 2016. "Real Effective Exchange Rate of Rouble and Competitiveness of Russian Agrarian Producers," Economies, MDPI, Open Access Journal, vol. 4(3), pages 1-19, June.
    4. Manzano, George N. & Martin, Kristine Joy, 2015. "Implications of a Philippine-US Free Trade Agreement on Trade in Goods: An Indicator Approach," Discussion Papers DP 2015-42, Philippine Institute for Development Studies.
    5. Jooste, Andre & Bahta, Sirak Teclemariam, 2005. "The effect of internationalisation on the beef and maize sub-sectors: The relevance of revealed comparative advantage measures," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 44(4), December.
    6. Zaghini, Andrea, 2003. "Trade advantages and specialisation dynamics in acceding countries," Working Paper Series 249, European Central Bank.
    7. repec:eco:journ3:2017-05-4 is not listed on IDEAS
    8. Macleans MZUMARA* & Anna CHINGARANDE*, 2016. "Inter-Sectoral Comparative And Competitive Advantages Of South Africa," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 26(1), pages 1-14.
    9. Manzano, George N. & Martin, Kristine Joy, 2015. "Implications of a Philippine-US Free Trade Agreement on Trade in Goods: An Indicator Approach," Research Paper Series DP 2015-42, Philippine Institute for Development Studies.
    10. Escaith, Hubert, 2007. "Old and new dualisms in Latin America and Asia: labour productivity, international competitiveness and income distribution," MPRA Paper 14510, University Library of Munich, Germany, revised 2008.

    More about this item

    Keywords

    International Trade; Revealed Comparative Advantage; Manufacture Exports;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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