Pattern Of Comparative Advantage Research Articles

ASEAN and China Exports of Labour-intensive Manufactures: Performance and Prospects

The ASEAN countries and China have substantially increased their exports of labour intensive manufactures (LIM) in the last two decades and the emergence of China as an exporter of manufactures in the eighties will present the ASEAN exporters with increasing competition in the future. The present paper examines the hypothesis that ASEAN may be crowded out of world LIM markets by China. It first presents and analyses the available data on commodity composition and country distribution of ASEAN and Chinese LIM exports and then examines the respective patterns of comparative advantage and considers the likely future impact of China's entry into world LIM trade on ASEAN development. In the final analysis education and work-force skills will be decisive factors in future developments, and the most important ASEAN exports are likely to be manufactures and services that are relatively intensive in human capital and technology rather than labour intensive.

Consistency Tests of Alternative Measures of Comparative Advantage

The commodity pattern of comparative advantage across countries is a central concept in international trade theory. Since the concept is based upon autarkic prices which are not observable in post-trade equilibria, its use in empirical research is most difficult. The literature reports numerous alternative indices that purport to comparative advantage. This paper examines the extent to which various measures are consistent using a large sample of trade flows. The results have important implication for judging empirical studies based upon particular choices of a measure for comparative advantage.

Comparative Advantage in Manufactured Goods: A Reappraisal

Japanese input coefficients are used to investigate the pattern of comparative advantage in the exportation of manufactured products in a cross-country framework. Estimates are made for the imports of manufactured products as well as for net exports. Also, alternative techniques of estimation are utilized and an attempt to explain the residuals in the regression equations and to indicate the predictive power of these equations is made. The paper shows that patterns of comparative advantage in manufactured goods can be explained by reference to commodity characteristics and country characteristics. In turn, intercountry differences in the extent of trade orientation, the concentration of exports, and foreign direct investment explain part of the residuals of the cross-country regression equations. Finally, it has been found that the method applied permits projecting the factor intensity of trade for individual countries.

UNIDO. Industry in a Changing World. New York: United Nat ions. 1983. xvii+369 pp.Illus. Sales No.: E. 83. II. B.6.

The book under review is a special issue of the Industrial Development Survey for the Fourth General Conference of the UNIDO. Its main aim is to examine structural changes in industry which in t urn bring about changes in the global pattern of comparative advantage. Thus, given the very interdependent world of today, policies followed in developed countries affect the newly induslrializing ones. Thus, for instance, the rising trend of protectionism in the developed world is producing serious repercussions in the less developed countries.

International Trade and Human Capital: A Simple General Equilibrium Model

The paper incorporates the formation of human capital into the two-factor, two-good model of international trade. Workers can choose between being unskilled and earning the corresponding wage or obtaining an education that enables them to earn a higher wage. The wages of skilled and unskilled labor and the direct and indirect costs of education are all determined endogenously, along with the terms of trade and the pattern of comparative advantage. The implications of the model are consistent with the extensive empirical research on the role of human capital in explaining patterns of comparative advantage.

Changing Patterns of Comparative Advantage in East Asia (Written in Korean)

Changing Patterns of Comparative Advantage in East Asia (Written in Korean)

Changes in the International Distribution of Resources and Their Impact on U.S. Comparative Advantage

T HE Heckscher-Ohlin (H-O) theory suggests international trade is determined by relative resource supplies among countries. Prior empirical research, such as work on the determinants of U.S. comparative advantage in a single year, has concentrated on the static predictions of H-O theory. However, H-O theory also suggests changes over time in resource supplies will alter trade structure. The present paper investigates this aspect of H-O theory. Particular emphasis is given to the role of world resource changes as an explanation of changes in U.S. trade and of the increased international competition in manufactured goods faced by the United States. Some recent studies have examined the relationship between changes in resource endowments and trade. Heller (1976) examined changes in the factor content of Japan's trade between 1958 and 1968 and found the observed patterns-consistent with changes in Japan's physical and human capital endowments. Stern and Maskus (1981) investigated changing factor input determinants of U.S. trade by estimating annual cross-section regressions over 1958-77. They suggested U.S. net exports made less direct use of unskilled labor over time. Further, analysis of the factor content of U.S. trade suggested increased U.S. abundance in physical capital relative to human capital between 1958 and 1971. Balassa (1979), using a 1970 crosssection of countries, concluded that physical and human capital accumulation largely explained changing patterns of comparative advantage in manufactures. Although these studies made important contributions, a number of issues remain concerning the relationship between resources and trade. Stern and Maskus, in listing directions for further research, cite first an examination of How and why endowments of physical capital, human capital and labor have changed within the U.S. and our major trading partners. This paper reports a substantial data effort which addresses this topic. Another important consideration is that the direct effect of resource endowment variation on trade has yet to be determined. Previously, inferences about the effect of resource endowments on trade have been based primarily on results from industry cross-section regressions. Authors of such work indirectly infer the effect of resource variation on trade by assuming the coefficients from such regressions reflect resource abundance. However, Leamer and Bowen (1981) recently demonstrated that signs of coefficients from such regressions need not reflect a country's true resource abundance. Thus, the usual negative coefficient for the capital-labor ratio in an analysis of U.S. trade cannot be used to infer the scarcity of capital and thus cannot be used to infer the effect of an increase in capital endowment on U.S. trade. Similarly, Balassa's procedure of first regressing, for each of a sample of countries, industry trade on input intensity and then using the estimated coefficients as the dependent variable in a cross-country regression on resources is an inappropriate method for inferring the effect of resources on trade. This paper advances consideration of these issues by investigating aspects of the relationship between resources and trade. Section II examines changing patterns of resource supply among thirty-four countries over 1963-75. Section III investigates whether these resource changes are associated with altered comparative advantage in manufactured goods. Section IV uses cross-country regressions to estimate the resource endowment, as opposed to factor input, determinants of U.S. manufacturing trade and thereby the direct effect of resource variation on U.S. trade. The Received for publication April 23, 1981. Revision accepted for publication November 30, 1982. * New York University. This paper is an outgrowth of research in Bowen (1980a) and of further work conducted at UCLA under a Ford Foundation grant directed by Edward E. Leamer. An earlier version was presented at the 1980 Southern Economic Association meetings in Washington, D.C. Comments by C. Michael Aho, Robert Baldwin, Edward Leamer, Joseph Pelzman, Leo Sveikauskas and an anonymous referee are gratefully acknowledged. The author remains responsible for errors.

An evaluation of the success of the hungarian economic reform: An analysis using international-trade data

The behavior of centrally planned economies (CPE's) will markedly differ from that of market economies (ME's). Tests of the success of decentralizing reforms in Hungary are based on comparing the behavior of post-reform Hungary to CPE's and ME's at similar levels of development. The basis of comparison is the pattern of comparative advantage. Discriminant analysis is used to examine whether there are significant differences between CPE's and ME's. The discriminant function, a linear function of the comparative advantages, is then used to classify pre- and post-reform Hungary. The results indicate that the reform has been effective.

Changes over time in the pattern of comparative advantage in manufactured goods: An empirical analysis for the period 1962–1974

This article presents a simple methodology for analysing empirically the extent, pace, and timing of changes over time in the pattern of comparative advantage in manufactured goods. This methodology is based upon the OLS estimation of time series of values of some elasticity- parameters measuring the impact of various country-attributes, and in particular of technology- endowments, upon the pattern of comparative advantage in each product. The methodology proposed here is then applied to the empirical analysis of shifts in the pattern of comparative advantage in 25 groups of products over the period 1962–1974.

The Changing Pattern of Comparative Advantage in Manufactured Goods

T HIS paper analyzes the changing pattern of comparative advantage in manufactured goods in the process of accumulation of physical and human capital that characterizes economic development. Section I of the paper describes the model to be estimated while section II defines the explanatory variables employed. The empirical results are presented in section III, and the policy implications of the results are analyzed in section IV.

Analysis of r & d failure

The basic issue of this paper is to investigate whether the relationship between market determinateness and performance found in the Israeli biomedical electronics industry reflects a particular pattern of comparative advantage or whether inadequate program execution was responsible for a part or all of the failures. For this purpose we build a tentative framework for analysing failure. This framework is based on a distinction between what we term causes of failure (inappropriate behavior or uncertainty) and their manifestation at the time of program suspension. Inappropriate behavior (and uncertainty) appears at three levels: overall firm level, choice of program, and program execution. Firm variables (size, market involvement, and management orientation) play a role both in determining inappropriate firm behavior and in explaining it. The results point to the predominance of inappropriate program selection (i.e. lack of comparative advantage) in explaining failure, despite the prevalence of faulty program execution. Inappropriate program selection is the result of insufficient exploratory search coupled with a management orientation which underestimates the importance of marketing aspects in the innovation of process. It also leads to inappropriate execution of innovation programs.

Factor Proportions and Comparative Advantage in the Long Run

The basic model of comparative advantage in the theory of international trade has been that associated with the names of Heckscher and Ohlin. The form in which this model has been analyzed over the last few decades has been in terms of the two-factor, two-good geometry developed by Lerner and Samuelson. All the six papers in the new Readings in International Economics (1967) under the section headed "The Theory of Comparative Advantage" are of this type. Recently the model has been extended in some interesting directions. Oniki and Uzawa (1965) have made one of the goods a capital good and studied the effect of accumulation and labor force growth on international equilibrium over time. Komiya (1967) has introduced a third nontrated good into the system and examined the consequences of this for various standard propositions of trade theory within the usual static context. Kenen (1965) has produced an ingenious model in which capital takes the form of augmenting the productivity of labor and land instead of being a separate "factor" in its own right. The present paper examines a model which combines the Oniki-Uzawa and Komiya features by making the third nontraded good a capital good. The main result is to show how factor proportions, and hence the pattern of comparative advantage, in the long run depend ultimately upon the values of two parameters, the propensity to save and the growth rate of the labor force.

Some Evidence on the International Price Mechanism

Previous articleNext article No AccessSome Evidence on the International Price MechanismArnold C. HarbergerArnold C. Harberger Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Journal of Political Economy Volume 65, Number 6Dec., 1957 Article DOIhttps://doi.org/10.1086/257985 Views: 10Total views on this site Citations: 31Citations are reported from Crossref Copyright 1957 The University of ChicagoPDF download Crossref reports the following articles citing this article:Long Hai Vo, Thai‐Ha Le COVID‐19 test‐kit trade and trade policy: Implications for developing countries, The World Economy 65 (May 2022).https://doi.org/10.1111/twec.13276Ari Van Assche, Byron Gangnes Production Switching and Vulnerability to Protectionism, (Oct 2019): 69–87.https://doi.org/10.1108/S1745-886220190000014006Robert C. 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