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What do alternative measures of comparative advantage reveal about the composition of developing countries'exports?

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  • Yeats, Alexander J.

Abstract

Despite their extensive applications in research and policy studies, no product level comparisons had been made between Bela Balassa's"revealed"comparative advantage (RCA) index and indices associated with the National Bureau of Economic Research (NBER) that reflect the standard Hecksher-Ohlin theory of comparative advantage. The author conducted several empirical tests for developing countries'exports of manufactured products, partly to identify factors that often lead to differences between the two indices. The results show that products in which developing countries have achieved a revealed comparative advantage are highly concentrated in a broad group of labor-intensive products; for other items, their RCAs are generally below unity. Within the labor-intensive group, however, developing countries failed to develop a revealed comparative advantage for about half of the items. A regression model suggests that in the labor-intensive group, revealed comparative advantage falls as the requirements increase for natural resources, for physical capital, and for human capital - including higher per capita wages, and more professional or technical personnel.

Suggested Citation

  • Yeats, Alexander J., 1990. "What do alternative measures of comparative advantage reveal about the composition of developing countries'exports?," Policy Research Working Paper Series 470, The World Bank.
    • Handle: RePEc:wbk:wbrwps:470
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    References listed on IDEAS

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    1. Baldwin, Robert E, 1971. "Determinants of the Commodity Structure of U.S. Trade," American Economic Review, American Economic Association, vol. 61(1), pages 126-146, 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. G. Helleiner, 1976. "Industry characteristics and the competitiveness of manufactures from less developed countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 112(3), pages 507-524, September.
    4. Gary Hufbauer, 1970. "The Impact of National Characteristics & Technology on the Commodity Composition of Trade in Manufactured Goods," NBER Chapters, in: The Technology Factor in International Trade, pages 145-231, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Bernard Hoekman & Guy Karsenty, 1992. "Economic Development and International Transactions in Services," Development Policy Review, Overseas Development Institute, vol. 10(3), pages 211-236, September.
    2. Goldar, Amrita & Bhanot, Jaya & Shimpo, Kazushige, 2011. "Prioritizing towards a green export portfolio for India: An environmental input–output approach," Energy Policy, Elsevier, vol. 39(11), pages 7036-7048.
    3. T. A. Bhavani & Suresh Tendulkar, 2001. "Determinants of firm-level export performance: a case study of Indian textile garments and apparel industry," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 10(1), pages 65-92.
    4. T.A. Bhavani & Suresh D. Tendulkar, 2010. "Determinants of Firm-level Export Performance: A Case Study of Indian Textile Garments and Apparel Industry," Working Papers id:2964, eSocialSciences.
    5. Mandeng, Ousmène Jacques, 1991. "Competitividad internacional y especialización," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.

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