scholarly journals Comparative Advantage in Innovation and Production

2021 ◽  
Vol 13 (3) ◽  
pp. 357-396
Author(s):  
Mariano Somale
Keyword(s):  
International Trade ◽  
Dynamic Model ◽  
Comparative Advantage ◽  
Real Income ◽  
Trade Costs ◽  
Manufacturing Industries ◽  
Market Size

This paper develops a dynamic model of innovation and international trade in which agents can direct their research efforts to specific goods in the economy. Trade affects the direction of innovation through its impact on the expected market size for an invention, leading to a two-way relationship between trade and technology absent in standard quantitative Ricardian models. Following a theory-consistent strategy to estimate the extent of endogenous adjustments in technology, I find that they can account for about half of the observed variance in comparative advantage in production in a sample of 29 countries and 18 manufacturing industries. In addition, the model suggests that standard Ricardian models overestimate the reductions in real income from increases in trade costs and underestimate the rise in real income due to trade liberalizations. (JEL F11, F14, L60, O31, O32)

scholarly journals On the Geography of Global Value Chains

Econometrica ◽  
2020 ◽  
Vol 88 (4) ◽  
pp. 1553-1598 ◽  
Author(s):  
Pol Antràs ◽  
Alonso Gortari
Keyword(s):  
International Trade ◽  
General Equilibrium ◽  
Equilibrium Model ◽  
Marginal Cost ◽  
Global Value Chains ◽  
Real Income ◽  
Optimal Location ◽  
Trade Costs ◽  
Value Chains ◽  
Multi Stage

This paper develops a multi‐stage general‐equilibrium model of global value chains (GVCs) and studies the specialization of countries within GVCs in a world with barriers to international trade. With costly trade, the optimal location of production of a given stage in a GVC is not only a function of the marginal cost at which that stage can be produced in a given country, but is also shaped by the proximity of that location to the precedent and the subsequent desired locations of production. We show that, other things equal, it is optimal to locate relatively downstream stages of production in relatively central locations. We also develop and estimate a tractable, quantifiable version of our model that illustrates how changes in trade costs affect the extent to which various countries participate in domestic, regional, or global value chains, and traces the real income consequences of these changes.

Trade and Spatial Growth

2017 ◽  
Vol 18 (1) ◽  
pp. 94-111
Author(s):  
Sirimal Abeyratne ◽  
N. S. Cooray
Keyword(s):  
International Trade ◽  
Comparative Advantage ◽  
Global Economy ◽  
Spatial Concentration ◽  
Trade Theory ◽  
Missing Link ◽  
Spatial Growth

Comparative advantage is based on ‘locational factors’ so that trade leads to growth and its spatial concentration. Until recently, the nexus between trade and spatial growth received little space within trade analyses though it did not appear to be a missing link in initial contributions to trade theory. The reshaping of the global economy with greater integration has called for analyses of trade and spatial growth. This article examines theoretical premises of the link between international trade and spatial growth, and the implications of reshaping of the global economy for the study of spatial growth within trade theory.

Corruption, Environmental Resources, and International Trade

2006 ◽  
Vol 6 (1) ◽  
Author(s):  
Priya Ranjan ◽  
Baishali Bakshi
Keyword(s):  
International Trade ◽  
Resource Management ◽  
Comparative Advantage ◽  
Environmental Resources ◽  
Over Exploitation

Abstract It is shown how corruption in the management of environmental resources can give rise to a comparative advantage in environment-intensive industries. International trade, in this setting, is not necessarily welfare improving. When corruption responds endogenously to the over-exploitation of resources, it is possible for international trade to generate forces that improve resource management by reducing corruption. Therefore, in this case trade could provide gains in addition to the usual gains.

scholarly journals DOES OPENNESS REDUCE WAGE INEQUALITY IN DEVELOPING COUNTRIES? PANEL DATA EVIDENCE FROM BANGLADESH

2012 ◽  
Vol 57 (02) ◽  
pp. 1250012 ◽  
Author(s):  
FARZANA MUNSHI
Keyword(s):  
Developing Countries ◽  
Panel Data ◽  
Theoretical Prediction ◽  
Trade Liberalization ◽  
Dynamic Model ◽  
Wage Inequality ◽  
Manufacturing Industries ◽  
Openness To Trade

This paper provides panel data evidence on trade liberalization and wage inequality in Bangladesh. Estimates from a dynamic model for five major manufacturing industries spanning the 1975–2002 period suggest that the effect of increased openness to trade is associated with a decrease in wage inequality. The result is in line with the theoretical prediction in that greater openness is expected to reduce wage inequality in developing countries.

scholarly journals Export Competitiveness Analysis of Creative Industries in the European Union

2020 ◽  
Vol 17 (1) ◽  
pp. 28-37
Author(s):  
Deimantė Krisiukėnienė ◽  
Vaida Pilinkienė
Keyword(s):  
International Trade ◽  
Comparative Advantage ◽  
Theoretical Background ◽  
Creative Industries ◽  
Research Purpose ◽  
The European Union ◽  
Revealed Comparative Advantage ◽  
Data Set ◽  
Trade Competitiveness ◽  
The Eu

AbstractResearch purpose. The research purpose is to assess and compare the competitiveness of the EU creative industries’ export.Design/Methodology/Approach. The article is organised as follows: Section 1 presents a short theoretical conception of creative industries; Section 2 presents the theoretical background of trade competitiveness indices; Section 3 introduces the research data set, method and variables; Section 4 discusses the results of the revealed comparative advantage index analysis; and the final section presents the conclusions of the research. It should be noted that the research does not cover all possible factors underlying the differences in the external sector performance and thus may need to be complemented with country-specific analysis as warranted. Methods of the research include theoretical review and analysis, evaluation of comparative advantage indices and clustering.Findings. The analysis revealed that the EU countries may gain competitiveness because of the globalisation effects and the development of creative industries. The increase in the revealed comparative advantage (RCA) index during the period 2004–2017 shows rising EU international trade specialisation in creative industries. According to dynamic RCA index results, France, Poland, Slovakia, Slovenia and Spain has competitive advantage in creative industries sectors and could be specified as ‘rising stars’ according to dynamic of their export.Originality/Value/Practical implications. A creative industries analysis is becoming increasingly relevant in scientific research. Fast globalisation growth affects the processes in which closed economies together with their specific sectors are no longer competitive in the market because productivity of countries as well as particular economic sectors depends on international trade liberalisation, technology and innovation. Scientific literature, nevertheless, contains a gap in the area of international trade competitiveness research in creative industries sector.

Upstart Industrialization and Exports: Evidence from Japan, 1880–1910

2018 ◽  
Vol 78 (4) ◽  
pp. 1068-1102 ◽  
Author(s):  
Christopher M. Meissner ◽  
John P. Tang
Keyword(s):  
Economic Development ◽  
Trade Costs ◽  
Export Growth ◽  
Market Size ◽  
Industrialized Countries ◽  
Stylized Facts ◽  
Trade Partner ◽  
Trade Partners ◽  
The Universe ◽  
Insight Into

Between 1880 and 1910, Japanese exports increased in volume, changed composition, and shifted from leading industrialized countries toward poorer Asian neighbors. Using a new dataset disaggregated by product and trade partner for the universe of Japanese exports, we findextensive marginsaccounted for 30 percent of export growth, with trade costs and market size associated with successful market entry. There was also considerable persistence in maintaining market presence and exit was rare. These stylized facts provide insight into both the country’s economic development, as reflected in its exported products, as well as the demand conditions of its trade partners.

Sign in / Sign up

Export Citation Format

Share Document