Abstract
The paper investigated sectoral comparative advantage of Botswana. Machinery/electric sector tops inter-sectoral comparative advantage in Botswana. It is followed by the textiles sector. The least in terms of comparative advantage is foot wear/head gear sector then followed by raw hides, skins leather and furs sector. The sector which tops in Botswana in comparative advantage, is not necessarily the one that tops in export value. Diamonds which dominate Botswana’s exports fall in the stone/glass sector and the sector possess less comparative advantage than other sectors ahead of it. It is recommended that Botswana should be promoting other products also other than diamonds in the international markets. That Botswana enacts a focused export promotion strategy on sectors which possess comparative advantage. Botswana should continue providing enabling environment that can lead to inflow of foreign direct investment through transnational corporations with technology that can improve sectoral comparative advantage.
Highlights
Various studies have focused on comparative advantage through products
This paper investigates sectoral comparative advantage of Botswana
The least in terms of comparative advantage is foot wear/head gear sector followed by raw hides, skins leather and furs sector
Summary
Various studies have focused on comparative advantage through products. The emphasis has been to identify products which have revealed comparative advantage. The principle of comparative advantage as Samuelson puts it is the most accurate thesis in the social sciences with both the truth and without being so trivial. It is the fundamental premises which rise specialization and benefits from international trade. The two economists talk of international differences in the costs of the endowments They propagate that a country with abundant endowments will use such endowments most intensively and produce goods which it is able to export. According to Lin and Chang (2009) the role of a country is to ensure that it is promoting its firms, industries and sectors to effectively use the nation’s current comparative advantage. The government puts in enabling environment without restrictions of operations of the firms and industries and enables them withstand externalities and it enables them through the principle of comparative advantage
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