Three Decades of Italian Comparative Advantages

Abstract

The paper explores the structure of Italian Revealed Comparative Advantages (RCA), focusing on the export structure itself, on its change over time and on its degree of persistence. The analysis is developed with the use of visual statistical tools - such as scatter plots - and nonparametric statistical techniques that allow to estimate the empirical distribution of the Balassa (1965) Index and to track its dynamic change during three decades, from the 1970s to present. The persistence in the pattern of comparative advantage is then analyzed along the lines of four interacting theoretical explanations based on the role of dynamic scale economies, Marshallian externalities, quality and vertical differentiation, and the absence of market incentives. From an empirical view point the persistence in the pattern of comparative advantage is subsequently conditioned to the presence of industrial districts.