Pattern Of Trade Specialization Research Articles

Brexit: Trade Diversion due to Trade Policy Uncertainty

AbstractThe paper quantifies how much of the reduction in Spanish trade flows with the UK after the 2016 Brexit referendum was diverted to other markets. To obtain reliable estimates of trade diversion we regress firm‐level changes in flows with all markets except the UK on changes in flows with the UK. In order to solve the positive correlation of trade flows between different markets we use the Brexit referendum as part of our instrumental variable. We then treat firms as units subjected to differential uncertainty shocks according to their initial patterns of sector and trade specialization. In particular, the referendum date is interacted with potential sectoral tariffs and pre‐referendum firm‐level exposure to the UK. The paper shows a close to full trade diversion for exports, mostly to other European countries, for those firms more exposed to that particular market (above 10%) and a heterogeneous response on the part of Spanish firms with low exposure (below 10%). Trade diversion for imports is weaker but the results are less robust. Given a particular share of exposure to the UK market, trade diversion appears to be more limited for big companies in comparison to small companies.

Trade Specialisation and Changing Patterns of Comparative Advantages in Manufactured Goods

Starting from the late 1950s, mainly as a reaction to Leontief’s paradoxical results, a large amount of research has underlined the great importance of technology and human capital in explaining international trade in manufactures. This study examines the patterns of comparative advantages for 42 countries and 91 manufactured classes of final and intermediate products and their changes between 2001 and 2019. The dynamics and the effects of the international fragmentation of production processes are also considered. Comparative advantages in each class of products are related to three different measures of a country’s human capital or technology endowment: the cost of labour, the level of formal education and the number of patents per capita. An indicator of home market size enters the model as a control variable. The econometric analysis reveals that in 2019, human capital or technology endowments explain comparative advantages in 70 out of 91 products. In particular, 31 products are positively and significantly associated with at least 1 of the 3 human capital or technology indicators, 34 products are negatively and significantly linked to at least 1 indicator, 5 products show contrasting results, 21 products are not related to any human capital or technology indicator. Between 2001 and 2019, comparative advantages for 15 classes of products shifted towards lower-technology countries and for 18 productions towards higher-technology countries. There were no shifts for 51 products. From a policy perspective, the distinction between high and low-technology productions could have some interesting implications. Since high-technology productions are characterised by a higher learning-by-doing rate, governments should foster domestic firms to upgrade the human capital or technology intensity of their productions.

Production fragmentation, foreign trade and structural complexity: A comparative analysis of Brazil and Mexico

Starting in the 1980s, Brazil and Mexico adopted diverging trade and production strategies, which had significant effects on their respective production and trade structures. This study investigates how the two countries’ different patterns of trade specialization affected the complexity of their respective production structures between 1995 and 2011. Although the foreign trade profiles of Brazil and Mexico differ mainly in their export structures, the processes of trade liberalization and integration into global value chains made the network of interrelationships between the different sectors less complex. Since these are Latin America’s two largest economies, a reduction in the complexity of their production structures not only has repercussions on the dynamics of their respective national economies, but also affects those of other countries in the region.

Concentración, extranjerización y el rol de las grandes empresas en el sector externo argentino (1994-2015)

Durante los últimos cincuenta años, las dinámicas productivas y el comercio internacional se han transformado significativamente y ha ganado importancia el papel de las grandes empresas, que crecientemente han incrementado su poder económico y su relevancia en el comercio exterior. El objetivo del presente artículo es analizar para el periodo 1994-2015, el desempeño de la cúpula empresarial en el comercio exterior argentino, las continuidades y rupturas que este actor registra entre la convertibilidad y la posconvertibilidad, la evolución en el nivel de concentración y extranjerización, y las implicancias que estos fenómenos tienen en materia de desarrollo económico para Argentina.

Women hold up half the sky? Trade specialization patterns and work-related gender norms

This paper studies whether export composition differences in gender-specific skills can affect individuals' work-related gender norms. We start by identifying female-oriented and male-oriented skills at the occupation level based on literature in neuroscience and medicine. Then with industries' occupational employment share data and exports data, we are able to construct country-level gender-specific skill export intensities. They are combined with gender norm information from World Value Surveys to test the hypothesis. To establish causality, a gravity model based IV strategy is adopted to get export intensities from trade flows predicted with exogenous factors. The empirical results show that if a country exports more in industries using female-oriented skills intensively relative to male-oriented skills, individuals in that country are more likely to have equal gender norms. Mechanism tests indicate that this relationship holds because expansion in female-oriented exporting sectors improves females' probability to work and their economic contribution to the household. In addition, we find suggestive evidence that some females choose to postpone their marriage age and have fewer children to seize increased job opportunities. Besides improved economic status, females also put more emphasis on work following export expansions in female-oriented skill sectors, which also contributes to equal gender norms.

An Analysis of Trade Specialization in Bangladesh, 1996-2011

Trade specialization has been studied extensively, and many researchers try to explain the patterns of the specialization and different factors that determine it. By using the Revealed Symmetric Comparative Advantage Index and the Galtonian Regression Technique, this study tries to determine the industries with trade specialization and analyze the transformation of the pattern of trade specialization in Bangladesh in the period 1996-2011 to show how the export and import specialization of industries changed and to what extent the pattern of trade specialization in Bangladesh has been transformed during the last sixteen years. Empirical analysis showed that the export of Bangladesh consists mainly of the garment industry, and Bangladesh import products largely belong to the category of commodities for further production and the support of the exporting sector. From the Galtonian regression analysis of export and import specialization, it has been found that the level of export diversification is very low, relatively stable which is confirmed by the low mobility effect. Bangladesh’s export specialization pattern is highly concentrated only in apparel products over the whole study period, and all other sectors contribute with a significantly smaller amount in total export share, but import is more diversified. For the development of the country, it is necessary to diversify its export basket.

Trade specialisation patterns in major steelmaking economies: the role of advanced economies and the implications for rapid growth in emerging market and developing economies in the global steel market

This study examines the steel-related export structure of the 15 largest steelmaking economies in 2015. The study provides a broad view of linkages between steel-related export structure, steelmaking technologies, and the level of economic development of each economy. To shed light on exporters’ patterns of specialisation, indices of revealed symmetric comparative advantage are used, indicating that patterns of steel exports differ widely across economies. In addition, this study focuses on the difference between steel exports in volume and value terms amid growing debate over the issue of value creation caused by excess capacity in the steel industry. This study concludes that the choice of steelmaking technologies and the level of economic development are significant determinants of trade specialisation patterns in major steelmaking economies. Although emerging market and developing economies have played a significant role in volume terms in the global steel market, advanced economies still have a crucial role as key suppliers, especially for high value-added products.

Estimating the impact of trade specialization and trade policy on poverty in developing countries

ABSTRACTThis paper investigates the impact of trade specialization on poverty. The empirical findings show that in developing countries manufacturing exports contribute to poverty reduction. But agricultural exports have a more significant effect on poverty in low-income countries. The analysis also confirms that trade specialization reduces poverty but under specific trade specialization patterns and policy conditions.

Second-generation Cooperation Agenda

South Asia remains one of the least integrated regions in the world, which is manifested in its lack of connectivity, low levels of intra-regional trade and weak investment flows. On the other hand, there is an apprehension that Southeast and East Asia could fall into a ‘middle income trap’, if they are not able to raise competitive strength and productivity further. In view of this, it is argued that there is a need for a framework of second-generation cooperation and integration embracing these three subregions in Southern Asia. This calls for concerted efforts to leverage existing institutional arrangements and put in place new avenues of subregional and inter-regional cooperation. Expansion of production networks, developments of value chains and greater integration of markets will allow these subregions to translate their respective comparative advantages into competitive advantages. Through harnessing opportunities of technology transfer, connectivity and greater factor mobility, and by taking advantage of cross-regional division of labour, these subregions could promote new patterns of inter-regional trade structure and specialization, which could benefit all the countries of Southern Asia.

Tariff Liberalization and Trade Specialization in India

Since the early 1990s, India has embarked on economic reforms that have progressively opened up the country to international trade. This paper analyzes the effects of reform on India’s trading structure from 1990 to 2006. It computes comparative advantage indicators on the basis of disaggregated trade flow data, and assesses the effects of trade liberalization on the evolution of India’s pattern of trade specialization. From dynamic panel regression analysis, evidence is found that those industries where import tariffs have been reduced the most have experienced the highest increase in specialization. Moreover, the analysis shows that trade liberalization has helped India improve its comparative advantage in industries with medium- to high-technology content, as well as in some of the industries enjoying the most robust growth in global demand.

Forestry industry trade by degree of wood processing in the enlarged European Union countries

This paper analyses the forestry industry trade of the New Member States (NMS-11) of the European Union (EU) on the enlarged EU-27 markets, focusing on three groups of wood products: raw wood, semi-finished and finished wood products in the 1999–2010 period. The best performing NMS-11 country in the forestry industry trade with the enlarged EU-27 is Cyprus with a trade surplus mostly based on finished or at least semi-finished wood products. The results suggest a convergence in the forestry industry trade specialisation of the NMS-11 countries. A significant variation in the mobility of the forestry industry trade specialisation is found, but with a deterioration in forestry industry trade specialisation patterns over time. The results suggest the crucial role that the wood-processing and furniture industries can play with finished wood products and their backward linkages to raw wood and semi-finished wood products for forestry industry competitiveness. Forestry industry management should focus on better quality and greater trade competitiveness in the vertical wood industry supply chains from lower to higher value-added and marketed wood products.

TRADE SPECIALIZATION PATTERN OF LITHUANIA

This paper analyses the pattern of trade specialization in Lithuania. The pattern of specialization is at the core of the international trade theory. The significance of the international trade lies in the fact that countries are not required to produce all their consumption goods; instead they can specialize in the production of certain goods. Many studies suggest that the more developed the country is; the more specialized is the structure of international trade and, therefore, a larger part of trade within a branch dominates in the total scope of international trade. The globalization and integration processes have a major impact on the international trade system. Lithuania's integration into the European Union has opened huge possibilities for Lithuanian international trade. Research shows that it has also influenced changes of trade specialization. At the same time, the research investigating such changes is missing. For this reason the actual problem is to estimate the pattern of Lithuanian trade specialization under existing conditions.The objective of this paper is to analyze the pattern of trade specialization of Lithuania under existing conditions.DOI: http://dx.doi.org/10.5755/j01.em.18.4.5474

América Latina y el ascenso de China: una perspectiva desde Brasil

Este trabajo tiene por objetivo analizar los impactos del ascenso de China como potencia económica en los países latinoamericanos, con especial referencia a Brasil. Los estudios destacan que las relaciones económicas siguen un patrón asimétrico, en donde los países de América Latina podrían verse atrapados en una trayectoria de crecimiento menos dinámica y sostenida a largo plazo. Este artículo se centra en identificar las tendencias que se han originado después de la crisis financiera internacional, proporcionando nuevas evidencias sobre las características de las relaciones económicas sino-latinoamericanas. Nuestros resultados sugieren que, particularmente en el caso de Brasil, existen evidencias de que se está acentuando el patrón de producción y especialización comercial regresiva.

Manufacturing competitiveness in euro countries. A German perspective

The aim of the paper is to illustrate a comparative analysis of the performance and traits of the manufacturing sector in Germany and Italy and against the background of the Euro countries as a whole. We explore factor endowment and compare the production and foreign trade specialisation patterns of three aggregated industries: resource-intensive, labour-intensive and knowledge-intensive products. The outcome of the analysis suggests that the strong positioning of German industry is thanks mainly to its technological strength supported by its increasing price competitiveness over other eurozone countries

Tariff liberalization and trade specialization: Lessons from India

This paper analyzes the effects of policy reform on the structure of India’s trade in manufactures, from 1990 to 2006. It computes comparative advantage indicators on the basis of disaggregated trade flow data and assesses the effects of trade liberalization on the evolution of India’s pattern of trade specialization. Industries where import tariffs have been reduced the most have experienced the highest increase in specialization. Moreover, trade liberalization has helped India improve its comparative advantage in industries with medium- to high-technology content, as well as in some of the industries enjoying the most robust growth in global demand. Liberalization policies have been instrumental in enhancing the international competitiveness of industries.

The pattern of specialization and economic growth: The resource curse hypothesis revisited

This paper explores the relation between countries’ pattern of trade specialization and long-term economic growth. It shows that countries specializing in the export of natural resource based products only fail to grow if they do not succeed in diversifying their economies and export structure. This conclusion follows from an empirical investigation that has three innovative features. First, it uses a dynamic panel data analysis. Secondly, it employs disaggregated trade data sets to elaborate different measures of trade specialization that distinguish between unprocessed and manufactured natural resource products and are informative about the countries’ trade diversification experience, their link to world demand trends and involvement in intra-industry trade. The final innovative aspect of the paper relates to our empirical findings: it is only specialization in unprocessed natural resource products that slows down economic growth, as it impedes the emergence of more dynamic patterns of trade specialization.

A new competitiveness measurement: Turkish experience in 1998-2008

This study examines how Turkish manufacturing industry responded to increased competitive pressures that it has faced over the past decade. Pressures arose both from growing trade competition from low-cost countries, which have similar trade specialisation patterns to Turkey’s, and from strong trend real currency appreciation that Turkey has experienced during this period. This paper’s main contribution to competitiveness measurement endeavours in Turkey is ensuring “a new practical competitiveness measurement” that includes not only cost of labour but also costs of “non-labour” production factors such as capital, energy and other imported material inputs to evaluate manufacturing industry. The paper finds that manufacturing industry has responded to competitive pressures by keeping their productivity gains, differentiating products, moderating wage growth and drawing on declining capital and imported input costs.

Estimation of Trade Specialization: the Case of the Baltic States

Global trade environment has changed in three major ways in recent decades. International trade has grown rapidly in value and volume, the composition of trade has altered significantly, and trade flows have been extensively liberalised. Increasing international trade is crucial to the continuance of globalization. Globalization and integration processes are having a major impact on the international trade system. Current economic integration processes (accession of Lithuania, Latvia, Estonia and other States into the EU) expanded the boundaries of the European Union thus influencing tendencies of changes of nature and pattern of trade specialization.

Employment and Export Specialization Patterns Versus GDP Per Capita Performance - Unifying Approach

The underneath motivation of this study is based on the findings confirming that specialisation is non neutral on a country's growth performance. Consequently, it seems important to analyse the evolution of specialization patterns along the process of economic development. The scope of the paper is twofold: first of all, it aims at understanding if the evolution of employment specialisation is reflected in the same manner in trade specialisation patterns. Secondly, it explores the link between the degree of specialization on one side and cross country GDP per capita performance on the other. The paper challenges other empirical studies present in the specialization literature and contributes by presenting simultaneously the evolution of sectoral dispersion patterns emerging from employment and trade data. The sample of countries (32 world economies on different stages of economic development), the time span (1980 onwards) and the sectoral composition of the two datasets are retained constant. By comparing the results obtained with various inequality indicators, including a wide range of absolute and relative measures, we demonstrate the relevance of the methodological setting used for the assessment of economic activity dispersion. Next, we perform nonparametric and semiparametric estimations in order to reveal the 'specialization curve' which describes the evolution of specialization along the development path. We find a support for nonlinear relationship between the two dimensions of specialization and GDP per capita levels, with a tendency towards despecialization in the initial phase of economic growth.

European Enlargement and Agro‐Food Trade

This paper investigates the level, composition, and differences in the dynamics of revealed comparative advantage and trade specialization patterns of the 12 new member states (NMS‐12) as part of the enlarged European Union 27 countries (EU‐27). The NMS‐12 are classified into four country groups: the Baltic States, the CEFTA‐5, and the Mediterranean and the Balkan regions. The empirical analysis employs a regression framework, a duration analysis, Markov transition probability matrices, and mobility indices. Trade increases with the EU enlargement and so does revealed comparative advantage in agro‐food products. There are catching‐up difficulties, as indicated by revealed comparative advantage, in higher added‐value processed products. Le présent article examine le degré, la composition et les différences de la dynamique des avantages comparatifs révélés ainsi que les caractéristiques de la spécialisation du commerce des douze nouveaux pays membres (NPM‐12) de l'Union européenne élargie (UE–27). Les 12 nouveaux pays membres sont divisés en quatre groupes: les États baltiques, les cinq pays membres de l'ALECE, la région de la Méditerranée et la région des Balkans. L'analyse empirique utilise un modèle de régression, une analyse de durée, des matrices de probabilités des transitions (Markov) et des indices de mobilité. Les échanges augmentent avec l'élargissement de l'UE tout comme les avantages comparatifs révélés des produits agroalimentaires. On observe des difficultés de rattrapage, comme l'indique l'avantage comparatif révélé, dans le cas des produits transformés à forte valeur ajoutée.