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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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    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, 1977. "'Revealed' Comparative Advantage Revisited: An Analysis of Relative Export Shares of the Industrial Countries, 1953-1971," The Manchester School of Economic & Social Studies, University of Manchester, vol. 45(4), pages 327-344, December.
    3. 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.
    4. André Sapir, 1996. "The effects of Europe's international market program on production and trade: a first assessment," ULB Institutional Repository 2013/8162, ULB -- Universite Libre de Bruxelles.
    5. Jeffrey J. Schott, 1994. "Uruguay Round: An Assessment," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 64, January.
    6. 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.
    7. 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.
    8. 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.
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    More about this item

    Keywords

    International Trade; Revealed Comparative Advantage; Manufacture Exports;
    All these keywords.

    JEL classification:

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

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