IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-00676229.html
   My bibliography  Save this paper

Power laws and comparative advantage

Author

Listed:
  • Jeroen Hinloopen

    (ASE - UvA - University of Amsterdam [Amsterdam] = Universiteit van Amsterdam)

  • Charles van Marrewijk

    (U.S.E. - Utrecht School of Economics - Universiteit Utrecht / Utrecht University [Utrecht])

Abstract

Using a comprehensive international trade data set we document empirical power laws for the distribution of the interaction between countries as measured by revealed comparative advantage. Using the recently developed estimator by Gabaix and Ibragimov (forthcoming) we find strong evidence in favor of power laws along the time, country, and sector dimension for three different levels of data aggregation. This finding is not predicted by any of the existing trade theories. The estimated power law exponents characterizing the distribution of revealed comparative advantage are stable over time but differ between countries and sectors. These differences are related empirically to country and sector characteristics, including population size, GDP, and factor intensities.

Suggested Citation

  • Jeroen Hinloopen & Charles van Marrewijk, 2011. "Power laws and comparative advantage," Post-Print hal-00676229, HAL.
    • Handle: RePEc:hal:journl:hal-00676229
    DOI: 10.1080/00036846.2010.543079
    Note: View the original document on HAL open archive server: https://hal.science/hal-00676229
    as

    Download full text from publisher

    File URL: https://hal.science/hal-00676229/document
    Download Restriction: no
    File URL: https://libkey.io/10.1080/00036846.2010.543079?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
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Colin Carter & Xianghong Li, 2004. "Changing trade patterns in major OECD countries," Applied Economics, Taylor & Francis Journals, vol. 36(14), pages 1501-1511.
    2. Carlos Cortinhas, 2007. "Intra-industry trade and business cycles in ASEAN," Applied Economics, Taylor & Francis Journals, vol. 39(7), pages 893-902.
    3. Ricardo, David, 1821. "On the Principles of Political Economy and Taxation," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, edition 3, number ricardo1821.
    4. Mary Amiti, 1999. "Specialization patterns in Europe," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 135(4), pages 573-593, December.
    5. Simon J. Evenett & Wolfgang Keller, 2002. "On Theories Explaining the Success of the Gravity Equation," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 281-316, April.
    6. A. E. Akinlo, 2008. "A cost function analysis of import demand for Nigeria," Applied Economics, Taylor & Francis Journals, vol. 40(22), pages 2911-2920.
    7. Harald Badinger, 2007. "Market size, trade, competition and productivity: evidence from OECD manufacturing industries," Applied Economics, Taylor & Francis Journals, vol. 39(17), pages 2143-2157.
    8. Robert C. Feenstra & Robert E. Lipsey & Harry P. Bowen, 1997. "World Trade Flows, 1970-1992, with Production and Tariff Data," NBER Working Papers 5910, National Bureau of Economic Research, Inc.
    9. Anderson, T. W. & Hsiao, Cheng, 1982. "Formulation and estimation of dynamic models using panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 47-82, January.
    10. Duncan Black & Vernon Henderson, 2003. "Urban evolution in the USA," Journal of Economic Geography, Oxford University Press, vol. 3(4), pages 343-372, October.
    11. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
    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. Igor Fedotenkov, 2020. "A Review of More than One Hundred Pareto-Tail Index Estimators," Statistica, Department of Statistics, University of Bologna, vol. 80(3), pages 245-299.
    2. Steven Brakman & Charles Van Marrewijk, 2017. "A closer look at revealed comparative advantage: Gross-versus value-added trade flows," Papers in Regional Science, Wiley Blackwell, vol. 96(1), pages 61-92, March.
    3. Ignacio Rosal, 2018. "Power laws in EU country exports," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 45(2), pages 311-337, May.
    4. Maureen Lankhuizen & Thomas De Graaff & Henri De Groot, 2012. "Product Heterogeneity, Intangible Barriers & Distance Decay: The effect of multiple dimensions of distance on trade across different product categories," ERSA conference papers ersa12p151, European Regional Science Association.
    5. Steven Brakman & Harry Garretsen & Charles Van Marrewijk & Arjen Van Witteloostuijn, 2013. "Cross‐Border Merger & Acquisition Activity and Revealed Comparative Advantage in Manufacturing Industries," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 22(1), pages 28-57, March.
    6. Maureen B. M. Lankhuizen & Thomas De Graaff & Henri L. F. de Groot, 2015. "Product Heterogeneity, Intangible Barriers and Distance Decay: The Effect of Multiple Dimensions of Distance on Trade across Different Product Categories," Spatial Economic Analysis, Taylor & Francis Journals, vol. 10(2), pages 137-159, June.
    7. Michał Brzeziński, 2013. "Robust estimation of the Pareto index: A Monte Carlo Analysis," Working Papers 2013-32, Faculty of Economic Sciences, University of Warsaw.

    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. Duranton, Gilles & Puga, Diego, 2014. "The Growth of Cities," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 5, pages 781-853, Elsevier.
    2. Hynes, Kate & Kwan, Yum K. & Foley, Anthony, 2020. "Local linkages: The interdependence of foreign and domestic firms in Ireland," Economic Modelling, Elsevier, vol. 85(C), pages 139-153.
    3. Goschin, Zizi & Constantin, Daniela L. & Roman, Monica & Ileanu, Bogdan, 2009. "Specialisation and Concentration Patterns in the Romanian Economy," MPRA Paper 88832, University Library of Munich, Germany.
    4. Umar Fachrudin & Fithra Faisal Hastiadi, 2016. "Impact Analysis of Normalized Revealed Comparative Advantageon ASEAN’s Non-Oil and Gas Export Pattern Using Gravity-Model Approach," Working Papers in Economics and Business 201603, Faculty of Economics and Business, University of Indonesia, revised May 2016.
    5. J. Peter Neary, 2009. "Putting the “New” into New Trade Theory: Paul Krugman's Nobel Memorial Prize in Economics," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(2), pages 217-250, June.
    6. repec:zbw:inwedp:652016 is not listed on IDEAS
    7. Sawyer, William C. & Sprinkle, Richard L. & Tochkov, Kiril, 2010. "Patterns and determinants of intra-industry trade in Asia," Journal of Asian Economics, Elsevier, vol. 21(5), pages 485-493, October.
    8. Henry Overman & Stephen Redding & Anthony J. Venables, 2001. "The Economic Geography of Trade, Production, and Income: A Survey of Empirics," CEP Discussion Papers dp0508, Centre for Economic Performance, LSE.
    9. Simonetta Longhi & Peter Nijkamp & Iulia Traistaru, 2003. "Determinants of Manufacturing Location in EU Accession Countries," ERSA conference papers ersa03p310, European Regional Science Association.
    10. Au, Chun-Chung & Henderson, J. Vernon, 2006. "How migration restrictions limit agglomeration and productivity in China," Journal of Development Economics, Elsevier, vol. 80(2), pages 350-388, August.
    11. Gilles Duranton & Diego Puga, 2001. "Nursery Cities: Urban Diversity, Process Innovation, and the Life Cycle of Products," American Economic Review, American Economic Association, vol. 91(5), pages 1454-1477, December.
    12. Andrew K. Rose, 1999. "One Money, One Market: Estimating the Effect of Common Currencies on Trade," NBER Working Papers 7432, National Bureau of Economic Research, Inc.
    13. repec:ilo:ilowps:271281 is not listed on IDEAS
    14. Bryan Graham & Jonathan Temple, 2006. "Rich Nations, Poor Nations: How Much Can Multiple Equilibria Explain?," Journal of Economic Growth, Springer, vol. 11(1), pages 5-41, March.
    15. Ana Paula Africano & Manuela Magalhaes, 2005. "FDI and Trade in Portugal: a gravity analysis," FEP Working Papers 174, Universidade do Porto, Faculdade de Economia do Porto.
    16. Harris, R. G., 1989. "New theories of trade and the pattern of global specialisation," ILO Working Papers 992712813402676, International Labour Organization.
    17. Onori, Daria, 2012. "Welfare, competition, specialization and growth," Research in Economics, Elsevier, vol. 66(4), pages 355-370.
    18. Fabien Candau, 2013. "Trade, FDI and Migration," International Economic Journal, Taylor & Francis Journals, vol. 27(3), pages 441-461, September.
    19. Davis, James C. & Henderson, J. Vernon, 2008. "The agglomeration of headquarters," Regional Science and Urban Economics, Elsevier, vol. 38(5), pages 445-460, September.
    20. Einian, Majid & Ravasan, Farshad, 2016. "A Perfect Specialization Model for Gravity Equation in Bilateral Trade based on Production Structure," MPRA Paper 72734, University Library of Munich, Germany.
    21. Emla Fitzsimons & Vincent Hogan & J. Peter Neary, 1999. "Explaining the Volume of North-South Trade in Ireland - A Gravity Model Approach," The Economic and Social Review, Economic and Social Studies, vol. 30(4), pages 381-401.
    22. Traistaru, Iulia & Nijkamp, Peter & Longhi, Simonetta, 2002. "Regional specialization and concentration of industrial activity in accession countries," ZEI Working Papers B 16-2002, University of Bonn, ZEI - Center for European Integration Studies.

    More about this item

    Keywords

    Social Sciences & Humanities;

    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:hal:journl:hal-00676229. 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: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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.