Dynamic Comparative Advantage Research Articles

Research on the optimization of investment structure of China's high-tech industries under the new development model of dual circulation

On May 14, 2021, at the Standing Committee of the Political Bureau of the CPC Central Committee, General Secretary Xi Jinping first proposed the concept of "dual circulation", emphasizing the construction of a new development pattern in which domestic and international dual circulations promote each other. Capital circulation is the primary link in opening up the circulation, and high-tech industries are the key areas in this new development pattern. In this context, it is of great significance and value to study the optimization of the investment structure of high-tech industries. This study takes the new dual circulation model as the starting point and conducts an in-depth analysis of high-tech industries from the perspective of investment structure optimization. By applying theories such as capital circulation, dynamic comparative advantage, and investment portfolio, the relationship between China's current economic development status and dual circulation is explained. At the same time, the development status of China's high-tech industries is compared with that of foreign high-tech industries, and the advantages, gaps, and problems between China's high-tech industries and developed countries are analyzed. The research plan explores the rationality of the investment structure of high-tech industries in the internal circulation, external circulation, and dual circulation from multiple perspectives such as industrial growth, investment efficiency, industrial upgrading, and global value chain. This will provide a theoretical basis and practical guidance for optimizing the investment structure of high-tech industries and help China achieve high-quality development under the new development pattern.

Spatial Evolution of Chinese Enterprises’ Cross-border Trade Products in the Context of International Cooperation along the Belt and Road

Abstract Based on the dynamic evolution of comparative advantage and product life cycle, this paper determines the measurement index for the spatial evolution of cross-border trade products of Chinese enterprises in the context of international cooperation along the Belt and Road, which mainly consists of the explicit comparative advantage index, proximity, the ability distance of products, and the opportunity return of products. Based on determining the measurement indexes of product spatial evolution in cross-border trade, we construct a product spatial structure evolution model based on product jumping decision and analyze the example of product spatial evolution in cross-border trade of enterprises. The results show that the proximity of food and activities (SITC0) to beverages and tobacco and alcohol (SITC1) is 0.528, to non-edible raw materials (SITC2) is 0.605, to manufactured products by natural materials (SITC6) is 0.536, and to miscellaneous products (SITC8) is 0.633. Compared to the other major products, the proximity of food and activities (SITC0) has the most excellent proximity, i.e., the smallest distance and the highest similarity, to these four product categories. This study investigates the relationship between spatial and dynamic comparative advantage of products and the development law in the context of the “Belt and Road”, to promote the better utilization of comparative advantage of the countries along the route.

The impact of productivity on export transitions: revisited evidence from the Vietnamese manufacturing sectors

The effect of total factor productivity (TFP) on exports particularly interests policy-makers and economists, but empirical evidence is ambiguous. This paper uses the 6-wave panel data in 2010-2015 to investigate the impact of TFP on export transitions at the firm level. We distinguish different types of export transitions, namely start, stop, continuity, fluctuation, and striving, and different phases of export transition. The Generalised Method of Moments (GMM) estimation is applied to control for endogeneity and unobserved time-invariant specific components. The results reveal that (i) the effect of productivity on export (the self-selection hypothesis) is heterogeneous, depending on specific sectors and types and phases of export transitions; (ii) productivity growth does not necessarily result in positive effects on and lead to participation in types and phases of export transitions. Our results also reveal strong evidence of favourable sunk cost in long-run export striving in nearly all sectors, and unlike previous studies, empirical results show a negative effect of sunk cost in some manufacturing sectors. Policy-makers should create dynamic comparative advantages and favourable environments for new exporters, focus the relevant policies on productivity stimulus, and strengthen the likelihood of survival for the domestic firms in the competitive global markets.

Determining Competitiveness of Pakistan Sports Goods Industry Using Revealed Comparative Analysis

This study calculates and explains the comparative advantage of Pakistan's sports goods industries in the international market. Static and dynamic comparative advantage analysis differentiates this work from the previous ones for the sports goods industry. The top ten Pakistani sports items have been chosen for this purpose. The product positioning of these products in the international market has also been determined. The results of this study indicate that China and India have a strong revealed comparative advantage in festivals, carnivals, or other forms of entertainment goods and Balls, respectively. In contrast, the United States, Thailand, and Indonesia have a significant revealed comparative advantage in Golf balls. China acquires a competitive position in the global market in 9 of Pakistan's top 10 sports items for 2019. According to dynamic revealed comparative advantage, Pakistan has the most significant revealed comparative advantage for inflatable balls from 2005 to 2019 in the international market, implying that Pakistan has a competitive edge in exporting this product. The Government of Pakistan needs to prioritize and facilitate the sports goods industry for increasing exports of this industry.

Dynamics of comparative advantage in India’s agricultural exports

Dynamics of comparative advantage in India’s agricultural exports

Patterns of external insertion in global value chains: a comparative analysis between Brazil and China

ABSTRACT The international trade literature has shown the benefits of the international fragmentation of production for developing countries. However, there are considerations about the hierarchy and control in Global Value Chains (GVCs). Thus, this research aims to evaluate the Brazilian and Chinese international insertion in GVCs by proposing an index about technological sophistication in exports (qtech) by technological intensity for 2005-2015. The results pointed out that the integration in GVCs and technological sophistication have been directed towards technological clusters in which Brazil has revealed comparative advantages, while China has been moving towards technological clusters with dynamic comparative advantages.

Brand Gravity-Resonance Capability on Brand Love: a Resource-Advantage theory Perspective

<p>This research intends to explore the experience of using brands in the past to increasingly love product brands through brand gravity-resonance capability, especially in the competition of the multi-business product sector. The novelty of this study lies in the synthesis of brand gravity variables, and brand resonance provides the proposed brand gravity-resonance capability variables of the resource-advantage theory of competition proposition results. Data were collected from 499 small and medium-sized business respondents through the dissemination of questionnaires and interviews. The SEM-PLS technique analyzes data with a path mediated by brand gravity-resonance capability on brand love. The results showed that brand gravity-resonance capability successfully mediated the brand experience relationship in brand love and the direct connection of brand experience in the past, and brand gravity-resonance capability in brand love managed to increase the sense of brand love. The practical implications of the novelty of this variable provide improvements to MSME managers or businesses to resonate the value of digital aggressiveness, configure science, integrate customer systems, and be oriented towards the creation of new markets. Conceptual implications contribute as new conceptual models that can bridge negative experiences to result in a dynamic and competitive comparative advantage in the market.</p>

Dynamic Comparative Advantage of India and China: A Study of Manufacturing Exports

This study analysed the dynamic export competitiveness of Indian manufacturing with China in the world market at HS 2-digit level classification. Dynamic RCA was utilised in this study for 2001-18. The study revealed that India was gaining a better dynamic competitive position of its manufactured exports in the world market than its Chinese counterpart. Besides this, the unfavourable dynamic position of lost opportunity included lesser Indian manufactured exports than China's. However, China took the lead in including a higher percentage of manufactured products in those dynamic positions that showed relatively higher responsiveness to the declining demand of the world.

Manufacturing Revolutions: Industrial Policy and Industrialization in South Korea

I study the impact of industrial policy on industrial development by considering a canonical intervention. Following a political crisis, South Korea dramatically altered its development strategy with a sector-specific industrial policy: the Heavy and Chemical Industry (HCI) drive, 1973-1979. With newly assembled data, I use the sharp introduction and withdrawal of industrial policies to study the impacts of industrial policy---during and after the intervention period. I show (1) HCI promoted the expansion and dynamic comparative advantage of directly targeted industries. (2) Using variation in exposure to policies through the input-output network, I show HCI indirectly benefited downstream users of targeted intermediates. (3) I find direct and indirect benefits of HCI persisted even after the end of HCI, following the 1979 assassination of the president. These effects include the eventual development of directly targeted exporters and their downstream counterparts. Together, my findings suggest that the temporary drive shifted Korean manufacturing into more advanced markets and created durable industrial change. These findings clarify lessons drawn from South Korea and the East Asian growth miracle.

Tourism specialization, economic growth, human development and transition economies: The case of Poland

Abstract This study examines the relationship between tourism specialization economic growth, and human development in a transition economy. It proffers a conceptual link between tourism specialization and human development through a division of labor framework. Dynamic comparative advantage, Sen's capability approach, and the translog production function characterize the conceptual relationship. The Limited Information Maximum Likelihood (LIML) estimates this relationship's nature in the case of Poland. Tourism specialization has a short-term effect on economic growth and a negative and indirect link to human development. Economic growth seems the channel that supports human development expansion, indicating short- and long-term significant, positive effects. Human capital reveals a U- shape pattern in its relationship with economic growth and human development. The study's implications are two testable propositions and two policy options suggesting tourism specialization's potential impact on private and public incomes, which are relevant developmental channels in transition economies.

Comparative Advantage, Endowment Structure and Trade Imbalances - Theory and Evidence

This paper constructs a theoretical model to illustrate the inherent dynamics between the trade imbalance and the comparative advantage of factor endowment structure under a two-country setting (South vs North). Our model shows that the shift of comparative advantage of factor endowment structure from labor-intensiveness to capital-intensiveness in Southern country would lead to the shrinkage in trade imbalances for the Northern country. We further argue that the increase in the wage level in the Southern country would also lead to the increase in its trade imbalance .Our paper provides a first theoretical look to how the trade imbalance between two trading partners could be affected by the dynamics of comparative advantage of factor endowment structure of respective trading economies. We employ the panel GMM consisted of 157 selected developing countries to test our theory. It is found that the empirical evidences presented in the end are broadly consistent with the theories proposed in this paper.

Extension of krugman’s comparative advantage model: Blessed fuels and cursed metals

Krugman’s dynamic comparative advantage model deals with spending effect from resource dividends. In its original setup dividends from resource export result in higher relative wages and therefore the Home country loses its production share to the Foreign country. The model had minor modifications so Home country has natural resources that can be either exported or used in production of traded goods. The learning is associated only with non-resource part of traded good production, and therefore the specialization range for resource producing country is narrower consequently it can easily lose it production share to Foreign country. As alternative to raw export the country can utilize its resources in production of traded goods. In that case, it is possible to reduce relative wages through change in demand for imported traded goods. Compared to fuel exporters, metal exporters are more vulnerable to losing their production share, and metal processing countries are much stronger in keeping their shares in the world production. From extension of Krugman’s comparative advantage model it follows that existence of large resource extractive sector would result in loss of comparative advantage more easily compared with country that have small resource sector. Distribution of resource wealth as pure transfers results in loss of domestic industries to foreign country. In contrast, utilizing resources as inputs and producing import substituting goods, while changing domestic demand preferences for traded and non-traded goods would have positive outcomes for the comparative advantage.

Migration, Knowledge Diffusion and the Comparative Advantage of Nations

Do migrants shape the dynamic comparative advantage of their sending and receiving countries? To answer this question we study the drivers of knowledge diffusion by looking at the dynamics of the export basket of countries, with particular focus on migration. The fact that knowledge diffusion requires direct human interaction implies that the international diffusion of knowledge should follow the pattern of international migration. This is what this paper documents. Our main finding is that migration, and particularly skilled immigration, is a strong and robust driver of productive knowledge diffusion as measured by the appearance and growth of tradable goods in the migrants' receiving and sending countries. We find that a 10% increase in the stock of immigrants countries exporters of a given product is associated with a 2% increase in the likelihood that the host country will start exporting that good from scratch in the following 10-year period. In terms of ability to expand the export basket of countries, a migrant with college education or above is about ten times more effective than an unskilled migrant. The results are robust to accounting for shifts in product-specific global demand, to excluding bilateral trade possibly generated by network effects, as well as to instrumenting for migration using a gravity model.

Dynamic comparative advantage analysis of rural and pastoral systems of small ruminant husbandry

Dynamic comparative advantage analysis of rural and pastoral systems of small ruminant husbandry

Technology and the dynamics of comparative advantage

AbstractThis paper explores how trade affects innovation in a two‐country, two‐good, two‐factor Heckscher–Ohlin model with heterogeneous firms. Trade openness induces an increase in process innovation in both industries. The increase is stronger in the comparative advantage industry. Trade openness boosts prospective entrants' profits in that industry, which leads to further increases in product innovation. Trade liberalization generates a different relative impact on innovation across industries, depending on trade costs. When they are high (low), it increases process innovation relatively more in the comparative advantage (disadvantage) industry, leading to TFP divergence (convergence) across industries.

Policy Interference in the Japanese Imports of the Primary Agricultural Products

This study tests the feasibility of dynamic comparative advantage theory in Japan. Specifically, we use annual trade data of primary agricultural products of 1976-2015 to obtain the government interference in imports. We find that the Japanese net export ratios in this category are significantly lower than the degree that the actual comparative advantages determine. We conclude that Japan does not try to improve its comparative advantages by imposing restrictive trade policies on the imports. In other words, the theory of dynamic comparative advantages does not hold in Japan, at least for the Japanese imports of the primary agricultural products.

The Change of Comparative Advantage of Agricultural Activities in East Java Within the Context of Asean Economic Integration

This paper analyses changes on agricultural trade patterns of East Java, Indonesia, versus six main ASEAN exporter countries. Based on the trade flow information, there are some dynamics of comparative advantage and export specialization from 2007 to 2013 in the 545 commodities comprising the agricultural sector. Products are mapped into four-different quadrants according to their level of comparative advantage and export specialization. Advantage-specialization appears to be important features of agro-trade for ASEAN countries because most of the growth in exports is under those competitive commodities. Little diversification towards new products has been found in the recent years. Gains appear to be larger than the losses due to international openness, while opportunities within the region have not been exploited. Agro-trade in the region still focuses towards extra-ASEAN and enjoys high levels of advantage- specialization in some key commodities. A large number of commodities were found to have little competition within ASEAN.

Dynamics of Comparative Advantage and Competitiveness of Textile and Apparel Industry: An Empirical Analysis for China and Bangladesh

Dynamics of Comparative Advantage and Competitiveness of Textile and Apparel Industry: An Empirical Analysis for China and Bangladesh

The Dynamic Nature of Competitive Advantage of the Firm

Trade through tougher competition expels less efficient forms from the market. As Rita G. McGrath [1] put it forward, in today's business environment the competitive advantage often evaporates in less than a year. While this seems to be devastating, in fact this is an opportunity for new comers. Twenty-five leading companies across various sectors were analyzed in-depth, drawing on more than 100 interviews with managers and knowledge workers. The study found that dynamic comparative advantage is the ultimate source of sustainable competitive advantage and investment into both high productivity and high absorptive capacity is required.

Comments by Ding Lu, on Zombie Firms and the Crowding-Out of Private Investment in China

October 01 2016 Comments by Ding Lu, on Zombie Firms and the Crowding-Out of Private Investment in China Author and Article Information Online Issn: 1536-0083 Print Issn: 1535-3516 © 2016 by the Earth Institute at Columbia University and the Massachusetts Institute of Technology2016Massachusetts Institute of Technology Asian Economic Papers (2016) 15 (3): 56–57. https://doi.org/10.1162/ASEP_a_00475 Cite Icon Cite Permissions Share Icon Share Facebook Twitter LinkedIn MailTo Views Icon Views Article contents Figures & tables Video Audio Supplementary Data Peer Review Search Site Citation Comments by Ding Lu, on Zombie Firms and the Crowding-Out of Private Investment in China. Asian Economic Papers 2016; 15 (3): 56–57. doi: https://doi.org/10.1162/ASEP_a_00475 Download citation file: Ris (Zotero) Reference Manager EasyBib Bookends Mendeley Papers EndNote RefWorks BibTex toolbar search Search Dropdown Menu toolbar search search input Search input auto suggest filter your search All ContentAll JournalsAsian Economic Papers Search Advanced Search Ding Lu: This paper scrutinizes the effects of state-led investment on economic efficiency in China at the microeconomic level. Since the early 1980s, China has achieved extraordinary success in economic development. A crucial feature of this developmental path is a proactive role played by the government. As observed by Lin (2012, 2013), while pursuing reforms to build a well-functioning market economy, the Chinese government has facilitated the development and upgrading of industries according to the economy's dynamic comparative advantages over years. The key elements of the government's proactive role include: (a) compensating for externalities created by pioneer firms in the process of industrial upgrading; (b) coordinating the desirable investments and improvements in soft and hard infrastructure; and (c) liberalizing entry into sectors in which the country has comparative advantages but at the same time providing some transitory supports and protections to unviable firms to maintain (social) stability.... You do not currently have access to this content.