Role Of Comparative Advantage Research Articles

Domestic Regional Synergy in Achieving National Climate Goals—The Role of Comparative Advantage in Emission Reduction

Domestic regional synergistic emission reduction is important in achieving national climate goals. This study constructed a game theory-based model for regional synergistic emission reduction, modified the Basic Climate Game using the exact-hat algebra method, and expanded the game model using a general spatial equilibrium model to incorporate cross-regional economic impacts generated by emission reduction actions through factors and product flows. The formation of regional comparative advantages in emission reductions and their impact on synergistic emission reductions were revealed through regional characteristics such as emission elasticity, sectoral structure, regional trade shares, and green total factor productivity. A form of synergy was then proposed that utilizes the comparative advantages of different regions, allowing for synergistic emission reductions across different income regions and engagement with regions that are still at the carbon-peaking stage in cooperation. Moreover, the model was created to be as close to the economic reality as possible to provide a trade, industry, and economic growth policy that complements emission-reduction policies.

Enthusiasm, Opinion Leaders, Comparative Advantage, and the Uptake Of Laparoscopic Resection For Colorectal Cancer Liver Metastases in Ontario, Canada: A Population-Based Cohort Study.

Numerous factors likely influence adoption of surgical innovations in large regions. We considered the role of comparative advantage, surgeon enthusiasm, and opinion leaders on uptake of minimally invasive liver resection (MILR) for colorectal cancer (CRC) metastases in Ontario. We used administrative data for patients undergoing liver resection for CRC metastases from years 2006-2015. Fourteen regions were divided into three groups based on overall rate of MILR for CRC metastases. Outcomes included postoperative complications, length of hospital stay (LOS), operative mortality, and 1-year survival. We evaluated uptake of MILR among groups and within groups between opinion leader and nonopinion leader surgeons. There were 2675 patients in the low-rate (n = 937), medium-rate (n = 919), and high-rate (n = 819) groups. In these same groups, the number of opinion leader surgeons was six, five, and six. Patient outcomes were similar among groups, except in the low-rate group LOS was 1day greater (7 vs. 6 and 6; p = 0.017). The rate of MILR for CRC metastases did not change significantly among opinion leaders in any group. This rate among nonopinion leader surgeons was steady and low in the low-rate group (1.7-8.0%, p = 0.80) and increased in the mid-rate group (2.4-31.8%, p = 0.0026) and in the high-rate group (7.7-40.9%, p < 0.001). Greater use of MILR was associated with a 1-day shorter LOS. Relative enthusiasm for MILR for CRC metastases among a small number of opinion leader surgeons likely facilitated or dampened uptake of this complex innovation.

Role of Comparative Advantage in Biofuel Policy Adoption in Latin America

The primary objective of this study is to evaluate whether renewable energy initiatives recently developed and implemented in Latin American and Caribbean countries are consistent with their national resource endowments, policy goals, and the general postulates of economic theory. Most classical and neoclassical theories suggest that international trade enhances economic efficiency and welfare of both parties involved in the exchange when they focus on producing and distributing products and services in which they have a comparative advantage. To achieve this goal, we analyze ethanol policy drivers using panel data from four major economies—Argentina, Brazil, Colombia, and Mexico. Since there is no universally accepted measure of comparative advantage, three separate models with different indicators—relative feedstock price, comparative export performance, and revealed comparative advantage—along with control variables, including the availability of production resources such as land and farm labor, are estimated. As expected, results show that the comparative advantage in feedstock production was one of the crucial factors in determining biofuel policy development and implementation in the four countries.

Pricing strategy of emerging market exporters in alternate currency regimes: The role of comparative advantage

The exchange rate pass-through (ERPT) literature has not considered product-level comparative advantage (CA) as a source of heterogeneous firm productivity, whilst the heterogeneous-firm trade literature suggests that a firm's production choice may determine its productivity level and also its pricing decision as both the degree of market power and the fixed costs of exporting vary across products. This paper combines these two strands of literature and empirically analyses the export pricing behaviour of Chinese and Indian exporters in 1994–2007 whilst considering 6-digit product-level CA at the intercept and at the slope. Previous ERPT estimates that did not take product-level CA into account are biased as CA is significant in both cases. ERPT is more incomplete in high CA products but export prices increase with export specialization because a stronger presence in export markets allows higher market power. If China were to let its currency float, Chinese exporters' pricing strategy would become a classic case of incomplete ERPT. On the contrary, Indian exporters' pricing strategy remains robust regardless of the exchange rate regime. This result supports recent calls for the adoption of a flexible exchange rate regime, particularly in the case of China.

Comparative advantage and the welfare impact of European integration

This paper investigates the welfare gains from European trade integration, and the role of comparative advantage in determining the magnitude of those gains. We use a multi-sector Ricardian model implemented on 79 countries, and compare welfare in the 2000s to a counterfactual scenario in which East European countries are closed to trade. For West European countries, the mean welfare gain from trade integration with Eastern Europe is 0.16%, ranging from zero for Portugal to 0.4% for Austria. For East European countries, gains from trade are 9.23% at the mean, ranging from 2.85% for Russia to 20% for Estonia. For Eastern Europe, comparative advantage is a key determinant of the variation in the welfare gains: countries whose comparative advantage is most similar to Western Europe tend to gain less, while countries with technology most different from Western Europe gain the most. — Andrei A. Levchenko and Jing Zhang

Explaining Export Varieties: The Role of Comparative Advantage

This paper examines how factor proportions determine product varieties, or the extensive margin, in exports of countries. A model of the economy with two countries, two factors, and a multitude of industries with productivity-heterogeneous firms explains the relative number of export varieties in each country. A quasi-Heckscher-Ohlin prediction on export varieties emerges from the model: Countries export more varieties in industries in which the countries have a comparative advantage. Empirical tests using disaggregated data on the U.S. imports confirm the theoretical prediction by showing that relatively (un)skilled-labor abundant countries tend to export more varieties in more (un)skilled-labor intensive industries. The paper provides both a theoretical foundation and empirical evidence for the importance of factor proportions in explaining the pattern of exports of product varieties.

Economic Transition and Industrial Restructuring in China: Structural Convergence or Divergence?

China has undergone substantial industrial restructuring since the economic transition. The triple process of marketisation, globalisation and decentralisation has had a significant influence on the changes in industrial structures in Chinese provinces. Using provincial–industrial level data for 1980–2003, this article finds that Chinese provinces are quite similar in their industrial structures. The interior provinces, however, have gradually specialised in resource-based industries, so their industrial structures deviate from the national structure, while the coastal provinces host fairly similar industries. Statistical analysis found that marketisation had enhanced the role of comparative advantage in natural resources, stimulating the divergence of industrial structures of provinces with different resource endowments while encouraging provinces with comparable endowments to develop similar industries. However, decentralisation generates economic fragmentation of domestic markets, fueling inter-provincial protectionism and rational imitation, and leading to the convergence of industrial structures among provinces. Globalisation has two effects. On the one hand, the globalised provinces have been converging in their industrial structures. On the other hand, the globalised provinces have rather different industrial structures from the underperforming provinces in exports and utilisation of FDI. This result implies that economic transition and its consequences are critical in understanding industrial restructuring in the transitional economies.

Foreign trade, local protectionism and industrial location in China

In this paper, we find that, in China, geographical changes of industrial bases in the 1980s had led to a slight drop in the extent of specialization and location imbalance, but in 1990s the specialization and industry imbalance have further developed. The geographical advantage for trade has a significant impact on the location patterns, and the effects of local protectionism are confined to the hinterland in 1990s. The role of comparative advantage in shaping industry location is evident, and some predictions derived from new economic geography are partially supported.

The Role of Comparative Advantage and Learning in Wage Dynamics and Intrafirm Mobility: Evidence from Germany

This article measures the importance of job level assignment based on comparative advantage and learning about workers’ ability in explaining intrafirm wage and mobility dynamics using survey data from the German Socio‐Economic Panel. The results reveal the importance of nonrandom selection of workers into the rungs of the firm’s job ladder. Measured and unmeasured ability play important roles in workers' rank assignment, with unmeasured ability being more important at higher levels of the hierarchical job structure. There is some evidence of learning effects for workers below age 35 generating mobility between upper and executive levels.

The role of comparative advantage in trade within industries: A panel data approach for the European Union

The Role of Comparative Advantage in Trade within Industries: A Panel Data Approach for the European Union. — A large share of EU member states trade is intra-industry trade (IIT) in the period 1985-1996; in particular, IIT is based on products differentiated in quality (vertical IIT). Moreover, exports from southern countries are located mainly at the lower end of the price-quality spectrum, whereas those countries with higher per capita incomes are located at the higher end. According to the vertical IIT models, we hypothesize that commercial specialization of members states over the quality spectrum within industries is explained by differences in technological, physical and human capital. The results show that comparative advantage is an important driver of the pattern of European trade within industries.

Service Industries in the World Economy

1. The Rise of Services: Some Factual and Theoretical Perspectives. Introduction. Services: Definition and Classification. The Recent Expansion of Services. Explanations for Growth. Understatement of Role of Services. 2. The Tradability of Services. TRadable and Non--Tradable Services. Information Technology and Tradability of Services. Transport Technology and the Tradability of Services. Service Multinationals and the Tradability of Services. Case Studies of the Development of Service MNEa S. Retail Internationalisation. Government Influences on the Tradability of Services. Changes in Consumer Requirements and Expectations. 3. International Trade and Foreign Direct Investment in Services. Introduction. Measuring Trade in Services. An Outline of Global Trade in Services. The Role of Comparative Advantage. Foreign Direct Investment in Services. International Trade in Services and the Developing Countries. Developing Country Service MNEa s. Eastern Europe, the Commonwealth of Independent States and International Trade in Services. Liberalizing International Trade in Services. 4. Services and the Global System of Cities. Services and the Global Urban System: Some Explanations. Services and Cities in the Global Urban System. Services and the Global Urban System: Some Examples. 5. Internationalization of Services and Restructuring of Cities. Services and Employment Restructuring in Large Metropolitan Areas: Some Comparisons. Impacts on the Urban Property Market: Offices. Changes in the Location of Services Within Cities. 6. Services in the World Economy: Some Reflections. Services in the 1990s: Victims of the Decade of Optimism?. Service--Dominated Economies: How Desirable?. Is the Globalization of Services inevitable?. Unfulfilled Potential of Telecommunications?. References. Further Reading. Bibliography. Index.

International Trade, Comparative Advantage and the Incidence of Layoff Unemployment Spells

The gains and losses to factors of production from trade are discussed primarily within the context of the Stolper-Samuelson theorem which focuses on factor rewards. But policy makers are more concerned about employment effects of trade. This paper focuses on the short-run effects of trade on the incidence of layoffs in U.S. manufacturing industries. A probit model with endogenous switching is employed to estimate the effects of trade shocks and explore the role of comparative advantage on layoffs. The evidence suggests that trade shocks play a minor role in the incidence of layoff spells. However, net importing industries tend to adjust their labor force through layoffs to a greater extent than net exporting industries. Copyright 1995 by MIT Press.

Ricardo's international trade theory: beyond the comparative cost example

that the labour embodied in the export goods given in exchange for one unit of the imported good is less than the labour which the country would have to utilise if it itself were to produce one unit of the imported good. There is no question that this 'Ricardian' model, based on the example of England and Portugal trading cloth for wine in chapter 7 of Ricardo's Principles of Political Economy and Taxation (1951A), is an excellent pedagogical device to illustrate the role of compara tive advantage in determining a country's trade pattern and the resulting gains from trade. Ricardo showed that trade enhances a country's welfare even though it may be more efficient than its trading partner in producing each of its commodities, as long as its relative productivity advantage differs between them. The principle of comparative advantage

Household and market production of families in a late nineteenth century American city

Urban families in the late nineteenth century depended upon their children as their most important source of labor income apart from the male head of house-hold. This paper explores the determinants of the labor force participation of children over 10 years old within the context of the economic theory of household and market production, using microlevel data from 1880 Philadelphia. The father's income and unemployment, the presence of the mother or father, boarders, servants, older and younger siblings, parents' literacy, and ethnicity, among other variables, are used in a probit analysis of the labor force participation of children. The results validate the economic theory of household and market production demonstrating, in particular, substitution between mothers and their daughters and the role of comparative advantage in family decisions concerning the allocation of their members' time. Ethnic differences were only important for daughters.