IDEAS home Printed from https://ideas.repec.org/p/shs/wpaper/2001.html
   My bibliography  Save this paper

India's Revealed Comparative Advantages in Merchandise Trade with Country Groups at Different Levels of Development

Author

Listed:
  • Binoy Goswami

    (Faculty of Economics, South Asian University)

  • Hiranya K. Nath

    (Department of Economics and International Business, Sam Houston State University)

Abstract

This paper uses annual trade data for 16 product groups to analyze India's comparative advantage (CA) in merchandise trade with high, middle income, and least developed countries during 2003-2018. The results suggest that India has always had CA over all three groups of countries in animal, food products, and textiles and clothing, and had comparative disadvantage (CDA) in wood. There are important variations in its CA/CDA for other items across country groups. These results are largely robust to alternative CA measures and to restricted subsamples of countries within each group. The analysis of distributional dynamics indicates that India's CA over least developed countries is more persistent than over other two groups. In contrast, India's CDA over middle income countries is more persistent than over other groups. In general, the probabilities of switching from CDA to CA are higher than those for shifting from CA to CDA for all three groups. India's CA in various products are likely to result from the availability of certain natural resources including climatic condition and geographic location, relative abundance of cheap unskilled, semi-skilled, and highly skilled labor, together with the market-oriented reforms and trade liberalization. The results have specific implications for India's policies to promote industries and trade.

Suggested Citation

  • Binoy Goswami & Hiranya K. Nath, 2020. "India's Revealed Comparative Advantages in Merchandise Trade with Country Groups at Different Levels of Development," Working Papers 2001, Sam Houston State University, Department of Economics and International Business.
    • Handle: RePEc:shs:wpaper:2001
    as

    Download full text from publisher

    File URL: http://www.shsu.edu/academics/economics-and-international-business/documents/wp_series/wp20-01_paper.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kristen Hopewell, 2018. "Recalcitrant spoiler? Contesting dominant accounts of India’s role in global trade governance," Third World Quarterly, Taylor & Francis Journals, vol. 39(3), pages 577-593, March.
    2. Rana Hasan & Devashish Mitra & Asha Sundaram, 2013. "What explains the high capital intensity of Indian manufacturing?," Indian Growth and Development Review, Emerald Group Publishing, vol. 6(2), pages 212 - 241, October.
    3. R. Rijesh, 2019. "International Trade and Productivity Growth in Indian Industry: Evidence from the Organized Manufacturing Sector," Journal of South Asian Development, , vol. 14(1), pages 1-39, April.
    4. Arnaud Costinot & Dave Donaldson & Ivana Komunjer, 2012. "What Goods Do Countries Trade? A Quantitative Exploration of Ricardo's Ideas," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(2), pages 581-608.
    5. Nath, Hiranya K. & Liu, Lirong & Tochkov, Kiril, 2015. "Comparative advantages in U.S. bilateral services trade with China and India," Journal of Asian Economics, Elsevier, vol. 38(C), pages 79-92.
    6. Bender, Siegfried & Li, Kui-Wai, 2002. "The Changing Trade and Revealed Comparative Advantages of Asian and Latin American Manufacture Exports," Center Discussion Papers 28478, Yale University, Economic Growth Center.
    7. Savita Bhat & K. Narayanan, 2009. "Technological Efforts, Firm Size and Exports in the Basic Chemical Industry in India," Oxford Development Studies, Taylor & Francis Journals, vol. 37(2), pages 145-169.
    8. Keld Laursen, 2015. "Revealed comparative advantage and the alternatives as measures of international specialization," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 5(1), pages 99-115, June.
    9. Panagariya, Arvind, 2011. "India: The Emerging Giant," OUP Catalogue, Oxford University Press, number 9780199751563.
    10. Alain McLaren & Meysut Saygili & Miho Shirotori, 2018. "Revealed Factor Intensity of Products: Insights from a New Database," UNCTAD Blue Series Papers 81, United Nations Conference on Trade and Development.
    11. Sanjib Pohit & Sanjukta Basu, 2012. "High Technology Merchandise Exports: Where does India Stand?," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 13(2), pages 183-206, September.
    12. Rana Hasan & Devashish Mitra & Asha Sundaram, 2013. "What explains the high capital intensity of Indian manufacturing?," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 6(2), pages 212-241, November.
    13. 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.
    14. Bent Dalum & Keld Laursen & Gert Villumsen, 1998. "Structural Change in OECD Export Specialisation Patterns: de-specialisation and 'stickiness'," International Review of Applied Economics, Taylor & Francis Journals, vol. 12(3), pages 423-443.
    15. Miho Shirotori & Bolormaa Tumurchudur & Olivier Cadot, 2010. "Revealed Factor Intensity Indices at the Product Level," UNCTAD Blue Series Papers 44, United Nations Conference on Trade and Development.
    Full references (including those not matched with items on IDEAS)

    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. Hiranya K. Nath & Binoy Goswami, 2018. "India’s comparative advantages in services trade," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 8(2), pages 323-342, August.
    2. Jenny P. Danna-Buitrago & Rémi Stellian, 2022. "A New Class of Revealed Comparative Advantage Indexes," Open Economies Review, Springer, vol. 33(3), pages 477-503, July.
    3. Stellian, Rémi & Danna-Buitrago, Jenny Paola, 2022. "Which revealed comparative advantage index to choose? Theoretical and empirical considerations," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    4. Ronen, Eyal & Benizri, Yohan, 2018. "Export Competitiveness and Trade Agreements: Analysis and Insights from Israel’s Experience," MPRA Paper 84945, University Library of Munich, Germany.
    5. Stellian, Rémi & Danna-Buitrago, Jenny P., 2022. "Revealed Comparative Advantage and Contribution-to-the-Trade-Balance indexes," International Economics, Elsevier, vol. 170(C), pages 129-155.
    6. Richa Khurana & D. K. Nauriyal, 2017. "Dynamics of Services Exports in India," Millennial Asia, , vol. 8(2), pages 178-193, October.
    7. Martin Grančay & Tomáš Dudáš, 2019. "Bilateral trade flows and comparative advantage: does the size matter?," Society and Economy, Akadémiai Kiadó, Hungary, vol. 41(4), pages 397-413, December.
    8. Nath, Hiranya K. & Liu, Lirong & Tochkov, Kiril, 2015. "Comparative advantages in U.S. bilateral services trade with China and India," Journal of Asian Economics, Elsevier, vol. 38(C), pages 79-92.
    9. Barman, Hemanta & Dutta, Mrinal Kanti & Nath, Hiranya K., 2018. "The telecommunications divide among Indian states," Telecommunications Policy, Elsevier, vol. 42(7), pages 530-551.
    10. Falkowski Krzysztof, 2017. "Long-Term Comparative Advantages of the Eurasian Economic Union Member States in International Trade," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 53(4), pages 27-49, December.
    11. Brian D. Varian, 2020. "The manufacturing comparative advantages of late-Victorian Britain," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 14(3), pages 479-506, September.
    12. Martin Grančay & Tomáš Dudáš & Ladislav Mura, 2022. "Revealed comparative advantages in academic publishing of “old” and “new” European Union Member States 1998–2018," Scientometrics, Springer;Akadémiai Kiadó, vol. 127(3), pages 1247-1271, March.
    13. Arvis, Jean-Francois, 2013. "How many dimensions do we trade in ? product space geometry and latent comparative advantage," Policy Research Working Paper Series 6478, The World Bank.
    14. Aditya Bhattacharjea, 2022. "Industrial policy in India since independence," Indian Economic Review, Springer, vol. 57(2), pages 565-598, December.
    15. Junshi Li & Yao Pan, 2023. "EU and China’s comparative advantage, trade complementarity and trade specialization dynamics in agricultural products," Asia Europe Journal, Springer, vol. 21(3), pages 351-379, September.
    16. 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.
    17. Naoki Sekiguchi, 2017. "Trade specialisation patterns in major steelmaking economies: the role of advanced economies and the implications for rapid growth in emerging market and developing economies in the global steel marke," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 30(3), pages 207-227, October.
    18. Konstantakopoulou, Ioanna & Tsionas, Mike G., 2019. "Measuring comparative advantages in the Euro Area," Economic Modelling, Elsevier, vol. 76(C), pages 260-269.
    19. Chen‐Ti Chen & John M. Crespi & William Hahn & Lee L. Schulz & Fawzi Taha, 2020. "Long‐run impacts of trade shocks and export competitiveness: Evidence from the U.S. BSE event," Agricultural Economics, International Association of Agricultural Economists, vol. 51(6), pages 941-958, November.
    20. Paul, Bino & Patnaik, Unmesh & Sahu, Santosh Kumar & Awasthi, Mansi, 2020. "What Does Increasing Labour Homogeneity Mean for Indian Manufacturing?," MPRA Paper 102904, University Library of Munich, Germany.

    More about this item

    Keywords

    Merchandise Trade; Comparative Advantage (CA); Comparative Disadvantage (CDA); Revealed Comparative Advantage (RCA); Revealed Symmetric Comparative Advantage (RSCA); Nonparametric Methodology; Distributional Dynamics; India;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:shs:wpaper:2001. 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: Christian Raschke (email available below). General contact details of provider: https://edirc.repec.org/data/deshsus.html .

    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.