Comparative Advantage Analysis Research Articles

Should Pakistan Liberalize Trade With India Against the Backdrop of the FTA with China? A Comparative Advantage Analysis for the Manufacturing Sector

Pakistan and India have not yet normalized trade relations and gained the full benefits of bilateral trade despite significant developments to this end since 2011. Pakistan has yet to reciprocate the most-favored-nation status granted by India. This study investigates the benefits of trade liberalization between the two countries by studying the global competitiveness of Pakistan’s industrial sector from a policy perspective. We construct a revealed comparative advantage index for manufacturing products (HS 2-digit level) for Pakistan, India, and China for the period 2003–12, and then identify the changing patterns of comparative advantage for Pakistan. We find that 18 industries should be protected upon liberalizing trade with India. These industries are termed ‘vulnerable’ as they have moved from either borderline competitiveness to becoming uncompetitive or vice versa. Additionally, the excessive concessions granted to China in its free trade agreement with Pakistan and the resistance to opening up trade with India may have resulted in inefficient trade, i.e., imports from a less competitive partner and exports to a less lucrative market. We aim to establish a direction for further research to determine the ex ante impact of trade with India on the economy via a change in the production levels of these vulnerable industries, given the impact of free trade with China and the availability of Chinese substitutes.

More on Measuring the Overall Revealed Comparative Advantage

The overall revealed comparative advantages approach aims to summarize the divergent expression of comparative advantages by commodity groups and countries. It represents an alternative to the traditional approach of Bella Balassa, Thomas Vollrath and others. The innovativeness of the overall revealed comparative advantages approach preconditions a certain prudence with regard to its use and interpretation. It is necessary to explore the potential of the approach in different conditions and different circumstances. It was found that the approach of overall revealed comparative advantages is resistant to the Euclidean distances and commodity classifications used for metrification. It has the potential to synthesize uniformly divergent changes in specialization by country and commodity groups and is a useful tool for the analysis of comparative advantages.

Possibilities for Integration of the Eastern Partnership Countries’ Export into the EU Markets

To implement the Eastern Partnership (EaP) framework launched in 2009, the EU seeks to bring its Eastern neighbours – Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine – closer to the European standards, promote regional relations with these countries, ensure sustainable growth of their economy, cooperate in trade area for the countries of the Eastern Partnership to become economically stronger, European countries, part of the European markets and structures. It is important for the EU that the countries neighbouring with its Eastern boarders are stable and their economies continue to develop. One of the ways to promote economic growth of a country or region is to develop its export. Geographical proximity of the markets provides the opportunity for the EaP countries to increase trade with the EU, thus creating the conditions for economic growth. The research was aimed at evaluating the possibilities for integration of the EaP countries’ export into the EU markets by identifying characteristic features of the countries’ export structure and their comparative advantages in trade with the EU. The article presents extensive analysis of export of six EaP countries, characteristic features of product specialization are identified, and comparative advantages of production by these countries and their effectiveness are identified. No similar studies have been carried out in a common context of the EaP countries till now. Export concentration (diversification), export structure similarity, the revealed comparative advantage and Lafay indices have been measured with the view towards the aim of the research. Empirical study of the export structure and comparative advantages of the EaP countries has been carried out using statistical data for the period 2005–2012 provided by Trade Map database, classification of products into product groups under the Combined Nomenclature. The results of the research have shown that current integration of the EaP countries’ export into the markets of the EU countries is not favourable enough for the countries due to irrationality of their export structure and low level of export diversification. Only Moldova’s variety of the exported products was deeper, broader and closer to the export by the EU. The results of the analysis of comparative advantages have shown that the set of product groups having comparative advantage in the export by the EaP countries to the EU is rather wide, such products have already occupied the EU markets niche, which could lead to more effective leverage of the export potential and, at the same time, create preconditions for economic growth of these countries and their export integration into the EU markets.

ANALISIS DAYASAING DAN STRATEGI PENGEMBANGAN AGRIBISNIS KOPI INDONESIA

<em>Indonesia is the</em><em> third largest coffee exporter in the world after Vietnam. In addition to be used as an export commodity, coffee is also grown in the country. In today's era of trade globalization, competition is getting tougher conditions, where individual countries to open their markets to each other. Based on that need to be analyzed competitiveness and the development of Indonesian coffee agribusiness. Competitiveness analysis is performed by means of comparative advantage analysis of Revealed Comparative Advantage (RCA) and a competitive advantage with Porter's Diamond theory approach. The results showed that Indonesian coffee has a competitive advantage both comparative and competitive. The analysis used to generate agribusiness development strategy is the SWOT analysis tool (Strengths, Weaknesses, Opportunities and Threats). Strategy resulting from the analysis is more directed to the technical aspect and cultivation.</em>

Calculation and Analysis on the Resource Advantages of the Characteristic Forestry and Fruit Industry around the Economy Circle of Tarim

In the Tarim economy circle of south Xinjiang, the forestry and fruit is the second pillar industry. The situation of the Tarim economy circle is given here, this paper calculated the resource advantage of the forestry and fruit industry with comprehensive comparative advantage, and obtained the result that the characteristic forestry and fruit industry should focus its development on apricot, pear, jujube and pomegranate, and made comprehensive comparative advantage analysis around the area of Tarim.

An analysis of Central America and Eastern Europe Revealed Comparative Advantages

The present study applies the revealed comparative advantages through the Balassa Index to determine the comparative advantages, disadvantages, and intra-product commerce tendencies between Central America and Eastern Europe with the purpose of determining the possibility of a free trade agreement for Central America. The approach of the study is through the connection between the European Economic Union and the Central American Common market, which shares a common background and relates them to research of Bela Balassa (1965) to determine how commerce between Central America and Eastern Europe has performed and the possibilities of growth that this commerce has through a free trade agreement. The study demonstrates the importance of analyzing competitive advantages. This paper presents the difference in competitive advantage between Eastern Europe and Central American establishing the benefits when negotiating a free trade agreement between both economic blocks. Therefore, analyzing and negotiating between products of competitive advantages may lead to a more sustainable economic growth.

Liberalization of services in Europe: Polish perspective on economic implications of the Services Directive

The original EU Service Directive proposal met widespread opposition and was subsequently narrowed down. Some believed that the competition from the New Member States would endanger the situation of the “old” EU service providers. We assess the importance of the Service Directive for Poland and other EU members by performing a revealed comparative advantage analysis and a computable general equilibrium simulation of the outcome. The liberalization provides minimal welfare gains for Poland and the main opponents of the Service Directive, while they are expected to be higher for small economies open to trade in services.

An Analysis of Comparative Advantage and Intra-North American Free Trade Agreement (NAFTA) Trade Performance

The authors analysed comparative advantage of Canada, Mexico and the United States in the context of the North American Free Trade Agreement (NAFTA). The authors found that there is empirical evidence as expected that the United States of America has a large number of products in which it has a comparative advantage in, followed by Canada. Mexico is the least competitive with fewer products compared to the United States of America and Canada. The authors have also concluded that having comparative advantage is not synonymous with trade performance in intra-regional trade as Mexico tends to benefit much more in spite of having a very few products in which it has comparative advantage as demonstrated by huge trade surpluses over Canada and the United States.

Business Diversification in the Hotel Industry: A Comparative Advantage Analysis

The accepted norm of hotels generating the highest portion of revenue from their room sales does not apply in the case of Taiwan. International tourist hotels in Taiwan tend to diversify their business by expanding their food and beverage (F&B) services. According to international tourist hotels' financial statements for 1996–2008 (published by the Taiwan Tourism Bureau), almost 60% generate higher revenue from their F&B services. Drawing on the concept of comparative advantage, this study assumes that a hotel's comparative advantage depends on evaluating the profitability between the F&B departments and the lodging departments. The authors propose a simultaneous equation model with qualitative and limited dependent variables, drawing on the interactions between hotel profitability and revenue structure. The empirical results show that hotels in which F&B services contribute the majority of the revenue have a profitability advantage.

Bibliometric analysis for development of research strategies in agricultural technology: the case of Taiwan

Due to rapid environmental change, policymakers no longer choose foresight issues based on their own experience. Instead, they need to consider all the possible factors that will influence new technological developments and formulate an appropriate future technological development strategy to the country through the technology foresight system. For the sake of gathering more objective evidence to convince stakeholders to support the foresight issues, researchers can employ bibliometric analysis to describe current scientific development and forecast possible future development trends. Through this process, a consensus is reached about the direction of future technology development. However, we believe that bibliometric analysis can do more for technology policy formulation, such as (1) offer quantitative data as evidence to support the results of qualitative analysis; (2) review the situations of literature publication in specific technological fields to seize the current stage of technology development; and (3) help us grasp the relative advantage of foresight issues development in Taiwan and the world and develop profound strategic planning in accordance with the concept of Revealed Comparative Advantage. For those reasons, our research will revisit the role that bibliometric analysis plays for nations while choosing the foresight issues. In addition, we will analyze the development of the technology policy in Taiwan based on bibliometric analysis, and complete the foresight issues selection by processing key issue integration, key word collection related to this field, the searching and confirmation of literature, development opportunities exploration, comparative development advantage analysis and the innovation-foresight matrix construction, etc.

Why Globalisation Doesn’t Spell Convergence: Models of Institutional Variation and the Comparative Political Economy of Punishment

This paper argues that contemporary patterns of punishment can only be fully understood through comparative analysis, and makes in particular a case for a political – economic approach based on the analysis of comparative institutional advantage of differently structured systems. This comparative advantage explains why, notwithstanding a measure of globalization and policy transfer in criminal justice, longstanding differences in the penal practices of different countries persist. The paper also examines the distrust of model-building in contemporary social theories of punishment, acknowledging that this distrust proceeds from some legitimate and eminently understandable concerns: but arguing that it is nonetheless obstructive to the capacity of comparative research to achieve its full explanatory potential. The second part of the paper examines the objections to typology or model-building in penal theory by drawing on the case studies of New Zealand and the USA – countries which on the face of it present difficulties for the model sketched in The Prisoners’ Dilemma (2008). It argues that the objections to model-building may be more readily overcome than is usually recognized; and that the apparently different enterprises of model-building or theoretical generalization on the one hand and detailed empirical research on the other are intimately linked in a number of ways. By moving between these complementary methods, moving back and forth between model and data, it is possible to revise and refine models in the light of further findings. And this in turn will open up new and fruitful fields of local empirical inquiry for criminologists and others. .

Export Comparative Advantage Analysis of Iranian Hen Egg by RCA & RSCA and RC Criteria

The potential impact of a liberalization of global trade on developing nations is a controversial subject. The liberaliza-tion of global agricultural trade, in particular, has been the focus of the debate for many years now and is part of the current WTO negotiations. Trade policies are believed to have influenced a country’s comparative advantage. Comparative advantage as a concept for evaluating the patterns of trade, is widely accepted and often used in theoretical and policy discussions. Livestock and livestock products, in the global trade, account for about one sixth, by value, of all agricultural trade. Iran is the one of main producers of hen egg in the world (FAO, 2004). Higher-than-global cost prices are the main disadvantage of the Iranian hen egg industry. The industry comprises of 700 million broiler day-old chicks, 10 million broiler breeders and 50 million layer day-old chicks. Hen egg is one of the Livestock products which are part of the non-oil export in Iran and its export consistently faces with fluctuation during last years. This paper looks at the performance of hen egg export and examines the comparative advantages indices like: revealed comparative advantage (RCA), revealed symmetric comparative advantage (RSCA) and (revealed competitive advantage(RC) for Iran and world main producers over the period 1990-2005. The source of data from 1990-2005 are supplied by F.A.O (2006). The changes in Iran’s export structure were compared with main producers ones. The results of the research showed, the trade and production policies and economic behavior of producers and exporters have been in such a way that they could not show a appropriate and timely response of world, also the re-vealed instabilities in the trends of RCA, RSCA and RC indices during the study period led to the conclusion that there is no well defined strategy and plan for utilization of low price production factors, effectiveness human power, knowledge of bargaining power and target markets. The objective of this paper is to try to identify: 1) The export comparative advantage of Iranian hen egg; 2) Its changing during the time; 3) The comparative advantage of Iranian hen egg in competition with other countries which are famous in trade and production of hen egg.

Comparative advantage analysis of bottled drinking water factory: A case study of Khorasan Region, Iran

In this study, the comparative advantage of bottled drinking water production in Khorasan province was investigated using dynamic reconfiguration connector(DRC) index and policy analysis matrix (PAM) in 2011. Data was collected from the site of External Trade Statistics Yearbook, FAO and annual foreign trade database. The nominal protection coefficient showed that there was an indirect tax on producers in all sectors. The NSP index was positive in all regions. Result supports this idea that Khorasan has comparative advantage in bottled drinking water production. When yield increase and production cost decrease, bottled drinking water production is useful in Khorasan province. Key words: Comparative advantage, policy analysis matrix, drinking water,Khorasan.

Rising Labor Cost and the Comparative Advantage of Chinese Textile Industry Analysis

The textile industry is a typical labor-intensive industry, which is also one of the most comparative advantage industries of China. However, with rising labor cost in recent years, the comparative advantage of Chinese textile industry is facing challenges. Based on the theory of comparative advantage analysis, this article analyzes of the comparative advantages of Chinese textile industry based on the background of rising labor cost while propose that Chinese textile industry shall transfer the Comparative Advantage to Competitive Advantage.

The Analysis of Comparative Advantages of Main Soybean Producing Countries

This paper selects the world's major soybean producing countries, the United States, Brazil, Argentina, China. From cultivation area, total output, yield per unit, import and export trade of the four main soybean producing countries, making a comparative study of the international competitiveness of soybean country, to reach the comparative advantages of various countries, then come to put forward countermeasure suggestion to the further development of China's soybean industry.

Analisis Tingkat Keuntungan, Keunggulan Kompetitif, Keunggulan Komparatif, dan Dampak Kebijakan Impor Pada Usaha Peternakan Sapi Potong di Provinsi Jawa Barat

The analysis of profitability, comparative advantage, competitive advantage and import policy impact on beef cattle fattening in west javaABSTRACT. The beef cattle fattening in Indonesia is financially and economically beneficial, even though the production process is in an economical condition with various trading policies with others countries. Those including the policies of import tarrif and quota on input that are aimed to have a more expensive price of import input, hence giving the chance for domestic input to compete. These will be an advantage for domestic feedloter, however the result of governmental policy are often far from expectation. Research conducted in West Java. This research used the survey method, with multistage random sampling and analyzed by using the Policy Analysis Matrix model to measure the efficiency of the business performance of beef cattle fattening. Result of the research shows that beef cattle fattening reached financial and economical benefits. Feedloters of local and imported cows in west Java has competitive advantage, local cows is more competitive than imported cows. Meanwhile efficiency indicator shows that feedloters of imported cows has more comparative advantage compared to the feedloters of local cow.

Should Russia comply with EU food safety norms in the wheat sector?

Abstract The impressive volumes of wheat production in Russia on the one hand and the good baking quality of Russian wheat on the other hand enabled Russia to become one of the important wheat producers and exporters of the world since the recent few years. However, Russia has a long way to go on the “front” of Sanitary and Phytosanitary (SPS), i.e. food safety, standards. As part of a larger study, financed by the German Research Foundation, the current research addresses the objective of estimating the potentials of wheat production in Russia under more stringent food safety standards as the current Russian national SPS regulations are. The comparative advantage analysis based on the domestic resource cost (DRC) approach is applied to estimate the possible compliance of Russian norms with European Union (EU) SPS standards. The DRC analysis resulting in a ratio of 0.37 provides evidence of high social profitability of wheat chain in the Stavropol region. Also the scenarios of compliance of Russian food s...

Evaluating Vietnam’s Changing Comparative Advantage Patterns

This article provides an empirical analysis of Vietnam's comparative advantage and its changes since the country's reform programme began in 1986. The framework for analysis is the concept of revealed comparative advantage. The findings indicate that despite a rapid shift in comparative advantage structure from primary products towards labour-intensive manufacturing during 1991-96, and a further slow shift towards technology-intensive manufacturing since then, Vietnam's comparative advantage is still largely based on the country's endowments of labour and natural resources. So far Vietnam has been able to expand its exports mainly by exploring these favourable conditions. However, exports based on such existing comparative advantage do not deliver significant value-added earnings. It is therefore recommended that relevant policy be implemented to move the economy and its export sector towards a desirable comparative advantage structure by: (1) strengthening food-processing and mining-processing industries to increase value-addedness of exports of primary products; (2) building up strong supporting industries to move the manufacturing sector away from outward processing; (3) encouraging investment in technology-intensive industries; and (4) enhancing human capital and raising the technology capacity of firms.

National port competitiveness: implications for India

PurposeThe purpose of this study is to perform an international comparison of logistics/port operations with a main focus on India.Design/methodology/approachUsing data from the transportation and freight service industry during 2000‐2005, this study first conducts revealed comparative advantage (RCA) analysis to investigate India's logistics competitiveness and then uses data envelopment analysis (DEA) to analyze the efficiency of India's container port operations.FindingsThe study's findings suggest that in terms of India's logistics competitiveness, its freight industry is relatively competitive while its transportation industry is not. Overall, while the study indicates that India's largest container port (Jawaharlal Nehru) is not very efficient; the RCA analysis shows that India still has a relative comparative advantage over its industrialized counterparts except for Japan and France in the transportation service industry. Interestingly, the DEA results also indicate that the efficiency value of the container port in India is second only to the US port of Los Angeles among the ports examined in industrialized countries.Research limitations/implicationsRCA indicators are only able to examine past and present industry conditions based on export results, and do not provide a detailed explanation of the reasons for changes in levels of competitiveness. As for DEA analysis, this study focused only on land and equipment as input variables primarily because of a lack of data on worker efficiency. It is suggested that there is an urgent need for an overhaul of port equipment if India wants to accommodate the growing volume of imports and exports in the future.Originality/valueThis paper provides a first step toward gaining insights into India's current logistics/port competitiveness position in comparison with other emerging markets and advanced economies. This paper also contributes to providing a better understanding of the competitiveness of emerging economies (BRICs & Next 11), which are viewed as rising stars and have not yet been fully investigated in the existing literature. Several recommendations are also provided.

Canonical Analysis of University Presence and Industrial Comparative Advantage

Technology transfer is a key component in the relationship between high-technology economic development and university knowledge production. Modeling the relationship between the output of universities and the economic growth resulting from that output, however, can be problematic. The primary issue stems from defining the scope of technology transfer and from accounting for the technical capacity of regions to absorb academic innovation. This article uses canonical correlation analysis to study this relationship via labor concentrations in high-technology industry and university R&D in areas relevant to those industries. The results indicate that moderately strong relationships do exist, most notably between computer and electronic equipment industries and academic R&D in engineering, life, and physical sciences. Recommendations include a stronger specification of human capital and regional economy interactions as predictive factors in the theory and several policy directives if such relationships exist at the local level.