Strong Comparative Advantage Research Articles

Cuenca hidrográfica agropecuaria y evolución de los servicios ecosistémicos en la región sur pampeana Argentina

Los modelos productivos actuales incluyen doble cultivo anual, aumento de agroquímicos, fragmentación de la biodiversidad y alteración de ecosistemas. El objetivo del presente trabajo es analizar de forma temporal las transformaciones de los servicios ecosistémicos (SE) de las unidades agroecológicas (UAE) de la Cuenca del río Quequén Grande (CrQG). La metodología se basa en la estimación de indicadores de sustentabilidad: conservación de la calidad de suelos y agua (CCSA), conservación de la biodiversidad (CB) y conservación del ecosistema (CE). La metodología utilizada fue el cálculo de las ecuaciones de los indicadores por UAE (a partir de datos de trabajos antecedentes y observación actual directa a campo), y se calcularon coeficientes de correlación lineal (r) entre los indicadores. Los resultados muestran que el proceso de agriculturización afecta sobre todo a los servicios de regulación de la unidad de Sierras y Serranías, y que en todas las UAE los ecosistemas fueron adaptados en su mayor parte a la provisión de servicios de abastecimiento de importancia comercial. Los gráficos de dispersión permitieron verificar correspondencia en los valores. Se concluye que los SE se ven afectados de diferente manera al interior de la CrGQ siendo fundamental una gestión que permita un futuro ordenamiento territorial. The Pampean Region has strong comparative advantages for agricultural production. Current production models include annual double cultivation with increased use of agrochemicals and strong alteration of ecosystems with biodiversity fragmentation. The aim of this work is to temporarily analyze the transformations of the ecosystem services (SE) of the agroecological units (UAE) of the Quequén Grande River Basin (CrQG). The methodology is based on the estimation of sustainability indicators: soil and water quality conservation (CCSA), biodiversity conservation (CB) and ecosystem conservation (CE).
 For these, surface data obtained from classified images on the advancement of agricultural development by UAE of the Basin and field data obtained in interviews and background studies are necessary. The results show that the agricultural instensification process was manifested with different intensity in the different UAE of the Basin, the Sierras and Serranías unit was the most affected in both periods, with high values of environmental risk. The conclusions are that SE are affected differently in the CrQG and therefore it is intended to contribute to the territorial planning of SE in the basin.

Indonesia’s Automotive Industry: Recent Trends and Challenges

Indonesia's growing middle class is the key driver of the rapid growth of the country's automotive industry over the last decade. Stable economic growth and government policies are other contributory factors, especially during the commodity boom period (2006-15). While there is some indication of improvements in the competitiveness of the industry, several structural weaknesses continue to hamper its growth. Traditionally, the industry has been dominated by Japanese car manufacturers, but Korean and Chinese carmakers have recently entered the sector. Although Japanese players have a strong comparative advantage in producing Internal Combustion Engine (ICE) cars, the newcomers are targeting a fresh segment-Electric Vehicles (EVs). The latter has been identified as one of the new priority industries based on global trends. This paper examines the recent developments and challenges in Indonesia's automotive industry. It examines key policies and their implications for the future of the sector.

Government Policies in a Granular Global Economy

We use the granular model of international trade developed in Gaubert and Itskhoki (2020) to study the rationale and implications of three types of government interventions typically targeted at large individual firms -- antitrust, trade and industrial policies. We find that in antitrust regulation, governments face an incentive to be overly lenient in accepting mergers of large domestic firms, which acts akin to beggar-thy-neighbor trade policy in sectors with strong comparative advantage. In trade policy, targeting large individual foreign exporters rather than entire sectors is desirable from the point of view of a national government. Doing so minimizes the pass-through of import tariffs into domestic consumer prices, placing a greater portion of the burden on foreign producers. Finally, we show that subsidizing `national champions' is generally suboptimal in closed economies as it leads to an excessive build-up of market power, but it may become unilaterally welfare improving in open economies. We contrast unilaterally optimal policies with the coordinated global optimal policy and emphasize the need for international policy cooperation in these domains.

Analysis of the trade relations between the Republic of North Macedonia and Great Britain

This paper’s goal is to identify the sectors in which the Republic of North Macedonia has a comparative advantage in terms of its trade relations with Great Britain. Both Revealed Comparative Advantage and Revealed Symmetric Comparative Advantage methodologies had been used in the empirical analysis made during the time period of 2009-2019. The results of the analysis point to the fact that the Republic of North Macedonia had a continuous comparative advantage in the category of miscellaneous manufactured articles in the course of the analysed period, which was mainly resulting from the export of clothes and other linen things, and it was also present in the category of crude materials, except fuel owing to the export of metal ore including metal-containing residues. In 2010, it was evidenced a comparative advantage in the category of chemical products. According to Hinloopen and Marrewijk classifications, the calculated comparative advantage of the Macedonian export in the British market varies from weak to moderate whereas, in the course of two time periods (2010 and 2013), it was evidenced a strong comparative advantage in the category of crude materials, except fuel.

Do Private Equity Investors Create Value? Evidence from the Hotel Industry

We show that PE sector specialists outperform generalists at every stage of the investment life cycle. Using granular data for thousands of U.S. hotels over the last two decades, we document that specialists exert a greater positive influence on more margins of hotel operations, earn higher net cash flows over the holding period, and achieve larger capital gains upon exit than do their generalist peers and other, non-PE investors backing ex ante equivalent assets. By contrast, PE generalists’ strongest comparative advantage may be better access to attractively priced acquisition financing. Our results provide novel evidence on the heterogeneity of PE investment strategies and associated performance outcomes.

Railroads, specialization, and population growth: evidence from the first globalization

We explore how railroads affected population growth during the first globalization (1865–1920) in Chile. We look at areas with a strong comparative advantage in agriculture using novel data that document 60 years of railroad construction. Using instrumental variables, we present four main findings. First, railroads increased both urban and rural population growth. Second, the impact was stronger in areas with more potential for agricultural expansion. Third, railroads increased specialization in agriculture when combined with a high level of the real exchange rate. And fourth, railroads had little effect on human capital and fertility. These results suggest that the effects of transportation technologies depend on existing macroeconomic conditions.

REVEALED COMPARATIVE ADVANTAGE OF SELECTED AGRICULTURAL COMMODITIES OF PAKISTAN

Since, Pakistan is bound to follow the international agreement drafted by WTO (World Trade Organization) to formulate trade policy which should be based on comparative and competitive advantages in the international economy, therefore the present study was designed to examine the specialization and competitiveness of Pakistan’s major crops. For this purpose, Bela’ Balassa’s (1965) indexes of Revealed Comparative Advantage (RCA) and Revealed Symmetric Comparative Advantage (RSCA) were employed, and moreover, secondary data from reliable sources related to crops from 1980 to 2013 were extensively utilized. The major findings of this research study revealed that Pakistan has a strong comparative and competitive advantage in rice, onion, dates, mango, mangoes- teen and guava during the period ranging from 1980 to 2013. Similarly, Pakistan has higher competitiveness in rice and mango at international level. Results also indicated that Pakistan has been facing disadvantages in potatoes during 1980 to 1997, and banana during 1980 to 2009, however, it was maintained but these vegetables/fruits have no competitiveness in the international market. The present study concludes that Pakistan has an excellent capability (being and agriculturally based economy) of higher growth of these products; therefore, these agricultural items could prove themselves a good source for Pakistan to earn higher foreign exchange.

An assessment of the international competitiveness of China's forest products industry

Using a cutting-edge method and value-added trade data for 33 countries from 2005 to 2015, we assess the international competitiveness of China's forest products industry in this paper. The international competitiveness is measured with three indices—revealed comparative advantage, and participation and position in the global value chains (GVCs). Our results show that China's forest products industry has gradually moved away from its large-but-weak status and started to mature and participate in the GVCs more competitively. With a strong comparative advantage of cheap labour resources in the past, the country has developed a labour-intensive forest products industry and raised its GVC position together with an ever higher participation. The heightened level of participation has come from the upward-trending, forward participation along the GVCs, whereas the backward participation has witnessed a downward movement over time. This study can thus help the industry identify concrete problems in factor allocation and structural upgrading and formulate specific measures for maintaining and enhancing its competitiveness.

The Comparative Advantage of Dutch Cities

The trade literature often treats countries as dimensionless points, which is a strong assumption. Agglomeration or lumpiness of production factors within countries can affect the national pattern of trade. In this paper we analyze comparative advantage patterns for 22 cities and 4 regions for (a selection of) 83 sectors within The Netherlands. Our findings are as follows. First, analysis of the lens condition indicates that the regional concentration of production factors (lumpiness) does not affect the Dutch national trade pattern. This suggests that the mobility of firms and factors of production is consistent with the so-called welfare maximizing integrated equilibrium. Second, despite the fact that the lens condition is verified, comparative advantage patterns across locations differ significantly from each other. We show this by comparing location specific distributions of the Balassa-Index (BI). Third, the differences across locations of comparative advantage patterns is determined by the interaction of local skill-abundance and sector skill-intensity, in line with the predictions of the factor abundance model. Moreover, at the sectoral level, location-specific variables such as market access or density, have limited effects. Fourth, most locations that house sectors that have a strong comparative (dis-) advantage relative to the Netherlands also have a strong comparative (dis-) advantage relative to the world. Only a few locations house sectors that are locally strong, but globally weak, and vice versa. The results indicate that international trade policies and disputes, such as Brexit or the US-China trade war, can have strong local consequences.

A Study on the Transformation and Upgrading of Zhejiang Marine Economic Industrial Structure Based on the Analysis and Evaluation of Scientific and Technological Innovation

Dong, Z., 2019. A study on the transformation and upgrading of Zhejiang marine economic industrial structure based on the analysis and evaluation of scientific and technological innovation. In: Li, L.; Wan, X., and Huang, X. (eds.), Recent Developments in Practices and Research on Coastal Regions: Transportation, Environment and Economy. Journal of Coastal Research, Special Issue No. 98, pp. 231–234. Coconut Creek (Florida), ISSN 0749-0208.This paper takes the transformation and upgrading of marine economic industrial structure in Zhejiang Province as the research object. First, the paper evaluates the efficiency of scientific and technological innovation of marine economy in Zhejiang Province by using the data envelopment analysis method. The empirical results show that the efficiency of scientific and technological innovation of marine economy in Zhejiang Province has great room for improvement, both from the dynamic analysis and from the static analysis. In this paper, the analytic hierarchy process is used to select the marine industries that should be given priority to in Zhejiang. The industries with high technology content, good economic benefits, and strong comparative advantages are taken as the key directions of choosing the marine superior industries. Through the adjustment of the industrial structure and the path of coordinated development of industry, university and research will be performed, and the overall improvement of innovation efficiency of marine science and technology and the transformation and upgrading of industrial structure in Zhejiang Province will be realized.

COMPETITIVENESS OF INDONESIAN CRUDE COCONUT OIL EXPORT IN DESTINATION COUNTRIES

This study aims to examine the competitiveness of Indonesian CCO in destination countries and examine what factors influence the competitiveness of Indonesian CCO in destination countries. The analytical methods used in this research were RCA, EPD, and panel data regression analysis. The time period used in this research was 1996 to 2017. The results of the study concluded that Indonesian CCO had competitiveness in the United States, the Netherlands, Malaysia, China, and Singapore. RCA index in each destination country showed that Indonesian CCO had a very strong comparative advantage. The EPD analysis showed that Indonesian CCO was in a rising star position in the Netherlands, Malaysia, China, and Singapore, while in the United States market Indonesian CCO was in a falling star position. The export volume of Indonesian CCO had positive effect, while trade openness of importing countries and export value of Philippines CCO had negative effect on the competitiveness of Indonesian CCO. The government and CCO exporters need to lobby the destination countries to import CCO from Indonesia, and to convince the destination countries, the quality of the CCO needs to be improved, so that Indonesian CCO will become more competitive than others.

Doğrudan Yabancı Yatırım Girişlerinde Açıklanmış Karşılaştırmalı Üstünlük Analizi

Rekabet gücü yüksek olan sektörleri belirlemek için Balassa endeksi olarak da bilinen açıklanmış karşılaştırmalı üstünlük (RCA) endeksi kullanılmaktadır. Bu endeksten hareketle doğrudan yabancı yatırım çekmek üzere hedef sektörleri belirlemek veya doğrudan yabancı yatırım için konumların karşılaştırmalı üstünlüğünü analiz etmek için kullanılacak bir yöntem olarak doğrudan yabancı yatırımda açıklanmış karşılaştırmalı üstünlük endeksi Loewendahl ve Barklie (2018) tarafından geliştirilmiştir. Bu çalışmada Türkiye’nin ve OECD ülkelerinin doğrudan yabancı yatırımlardaki açıklanmış karşılaştırmalı üstünlüklerinin sektörel olarak belirlenmesi amaçlanmıştır. Bu amaçla Loewendahl ve Barklie (2018) tarafından geliştirilen endeksi kullanılmıştır. Türkiye’nin doğrudan yabancı yatırımlarda açıklanmış karşılaştırmalı üstünlüğe sahip olduğu sektörler belirlenmiştir. RCA-FDI endeksi değerleri 2013 ve 2017 yılları için ayrı ayrı hesaplanmış ve Türkiye’nin doğrudan yabancı yatırımlardaki açıklanmış karşılaştırmalı üstünlüklerindeki değişim açıklanmıştır. Ayrıca OECD ülkeleri için temel ekonomik faaliyet alanlarında endeksi hesaplanmıştır. Türkiye için hesaplanan endeksi değerlerine göre ana faaliyet alanları içerisinde “tarım, ormancılık ve balıkçılık” sektöründe güçlü karşılaştırmalı üstünlük, “imalat” sektöründe zayıf karşılaştırmalı üstünlük, “elektrik, gaz, buhar ve iklimlendirme temini”nde güçlü karşılaştırmalı üstünlük, “su tedariki, kanalizasyon, atık yönetimi ve iyileştirme faaliyetleri”nde zayıf karşılaştırmalı üstünlük, “inşaat”ta zayıf karşılaştırmalı üstünlük ortaya çıkmıştır. Bununla birlikte “hizmetler” sektöründe ise rekabet avantajı bulunmamaktadır. Türkiye’nin en güçlü karşılaştırmalı üstünlüğünün olduğu sektörler “kütüphaneler, arşivler, müzeler ve diğer kültürel faaliyetler” ve “kara taşımacılığı ve boru hatları taşımacılığı”dır. OECD ülkelerinde güçlü karşılaştırmalı üstünlüğe sahip olan ülke sayısının en fazla olduğu sektör “tarım, ormancılık ve balıkçılık”tır. Karşılaştırmalı dezavantaja sahip olan ülke sayısının en fazla olduğu sektör ise “madencilik ve taşocakçılığı”dır. “İmalat” sektöründe ise hiçbir ülke güçlü ve orta karşılaştırmalı üstünlüğe sahip bulunmamaktadır.

Comparative Analysis of Competitiveness of Shangai Cooperation Organization Members and Turkey

The Shanghai Cooperation Organization (SCO) is a regional integration that emerged in the Central Asian region about 20 years ago and has been on the agenda of Turkey for the last few years. In particular, disputes between Turkey-and EU in recent years have led the various segments to express the SCO as a possible alternative to the EU in the future. In this study, the export specialization and competition levels of the SCO region countries and Turkey are analysed in terms of products and Lall (2000) based technological categories. The comparative advantages of the SCO countries and Turkey are calculated using the Balassa index for the 1993-2016 interval. Analysis revealed that Turkey has a comparative advantage in especially low and medium technology and resource based products. It is evident that while the Russian Federation, Kazakhstan, and Kyrgyzstan have comparative advantage in primary and resource-based products, China has over-unity RCA in low and medium technology products, India in primary, resource-based and low-tech products, and Pakistan in low technology and primary products. In other words Turkey and SCO countries possess a similar comparative advantage pattern with respect to the technological classification. Besides, the ratio of advanced technology products with RCA over-unity is almost zero for all the countries in consideration. Additionally, in the case of products in which Turkey has a strong comparative advantage, it is shown that the closest competitors are China, India and Pakistan.

MINT ULKELERI'NIN REKABET GUCU UZERINE BIR DEGERLENDIRME AN EVALUATION ON COMPETITIVENESS OF MINT COUNTRIES

The aim of this paper is to examine the MINT countries comparative advantage and international competitiveness of manufacturing industries as a whole and of all sub-sectors of these industries. The analysis is based on Vollrath’s (1991) competitiveness indices. The analysis based on Vollrath’s indices shows that Turkey has a strong comparative advantage in aggregate commodity groups of manufacturing industry. In general terms, it can be stated that the competitive disadvantage in the manufacturing industry is in Nigeria, Indonesia and Mexico, respectively. Our findings show that Turkey has high competitiveness compared to the other three countries in this period. However, the predictions that MINT countries as a whole will be a center of economic power among emerging economies will depend on their use of economic policies in a way that makes their existing advantages a reality.

Przewagi komparatywne USA w eksporcie wybranych surowców roślinnych na Jednolity Rynek Europejski

Celem artykułu było zidentyfikowanie przewag komparatywnych USA w eksporcie wybranych surowców roślinnych na Jednolity Rynek Europejski (JRE) na tle największych unijnych producentów i eksporterów analizowanych grup produktów w latach 2003-2017. W badaniach wykorzystano dane pochodzące z zasobów Konferencji Narodów Zjednoczonych ds. Handlu i Rozwoju (UNCTAD). W analizie przewag komparatywnych zastosowano wybrane wskaźniki ujawnionych przewag komparatywnych (XRCA, MRCA, RTA), wskaźnik pokrycia importu eksportem (CR), wskaźnik specjalizacji eksportowej (SI) indeks handlu wewnątrzgałęziowego Grubela-Lloyda (IIT) oraz udziały w eksporcie. Na podstawie przeprowadzonych analiz można stwierdzić, że USA generowały wysokie przewagi komparatywne w eksporcie na JRE owoców i orzechów oraz surowców oleistych, które zapewniały im znaczącą, odpowiednio prawie 25-procentową i ponad 15-procentową część ogółu przychodów z tytułu eksportu artykułów rolno-żywnościowych do państw UE.

Hallyuwood: Korea’s Comparative Advantage in the Global Motion Picture Industry

After Hollywood and Bollywood, the recent success of the Korean motion picture industry has been described as the rise of “Hallyuwood,” suggesting that Korea has become the third pillar of the global motion picture industry. In order to explain the emergence of Hallyuwood, this paper uses a global value chain (GVC) approach and highlights some of the economic determinants in the internationalization of the Korean movie industry. Using input-output data and firm-level information, the paper first analyzes the position of Korea in the motion picture GVC and assesses the ways in which the movie production has become more global. The results indicate that Korea is the country with the strongest comparative advantage in the motion picture value chain. The paper then discusses different aspects of the internationalization of the Korean motion picture industry, in particular: the role of co-production and foreign partners, the concentration and vertical integration of the industry, and the creation of a global brand. Finally, the paper looks at the main challenges the Korean industry will face if it desires to further expand and remain competitive, discussing government policies and the impact of the rise of China on Korea’s movie industry. Overall, the paper emphasizes that while typically national, cultural products can also benefit from global business strategies.

Social responsibility of banks in the function of comparative advantage on the market

The business operation of companies is not neutral and is not perceived any more in terms of profitable operations, but also in terms of whether it is beneficial for the society. Social responsibility contributes to improving relationships with key stakeholders, thus contributing to the long-term sustainability of the company. The paper points out to the positive link between corporate social responsibility (CSR) and the reputation of the bank. Without CSR, neither the improvement nor the expansion of banking operations is possible. The aim is to point out that profit and CSR are not opposed categories and that the CSR of banks represents a strong comparative advantage on the market. The paper gives a theoretical and practical overview of the concept of corporate social responsibility (CSR), with a focus on the banking sector.

Employment Intensity of Food Products and Processing Industry in India

Indian food products and processing industry has seen significant growth and changes over the past few years, driven by changing trends in markets, changing demographics, growing population and rapid urbanisation. It is one of the labour intensive industries having the potential to provide massive skilled as well as unskilled employment to the growing Indian labour-force. The objective of this study is to investigate the employment elasticity of food products and processing industry in India at aggregate as well as disaggregate levels using Annual Survey of Industry data. Further, performance of food products and processing industry is also compared with the total organised manufacturing sector. The findings suggest a decline in the level of employment and output of food products and processing industry in India over the period 1999-2015. The decline may be due to fall in the share of major four sub-industries namely sugar, grain mill products, vegetable and animal oils and fats, and other food products. Any fluctuation in the growth of these industries would affect the overall growth of food products and processing industry. The resultant employment elasticity also declined over the period from 0.17 in 1999-2007 to 0.15 in 2008-2015. Significant difference is also seen in the value of employment elasticity at sub-industries level in the food products and processing industry over the period. However, food products industry is having the capability to drive the Indian economy towards higher growth because of strong comparative advantage over other nations and other sectors, with attention to investment, and generation of skilled man-power

Pozycja konkurencyjna Polski na światowym rynku zagęszczonego soku jabłkowego

Celem badań było określenie pozycji konkurencyjnej Polski na rynku zagęszczonego soku jabłkowego w latach 2004–2015. W badaniu wykorzystano: saldo obrotów, udział w światowym eksporcie, wskaźnik ujawnionej przewagi komparatywnej (RCA) oraz indeks relatywnej komparatywnej przewagi eksportu (XRCA). Zastosowane mierniki wykazały, że eksport z Polski był konkurencyjny. Saldo handlu zagęszczonym sokiem jabłkowym w latach 2004–2015 wzrosło. W badanym okresie zwiększył się też udział Polski w światowym eksporcie soku. W latach 2004–2015 Polska miała przeciętną i silną przewagę komparatywną w eksporcie zagęszczonego soku jabłkowego, a Chiny silną. Najsilniejszą przewagę komparatywną w latach 2013–2015 uzyskały Mołdawia i Ukraina.

The competitiveness of medicinal plants in Central Java Indonesia

Indonesia hold a potential opportunity to be a pharmaceutical production country. In the other side, Indonesia facing agriculture product and market competition internationally and domestically. Improving competitiveness of specific products are aimed to hit the export market and also to be able to compete with import products in domestic market. Considering Indonesian market opportunity, therefore we perform this study aiming to examine the competitiveness of medicinal plants in Central Java area. The basic method applied in this study was descriptive and data sources are primary and secondary data. Data were analyzed using Revealed Comparative Advantage (RCA) and Trade Specialization Index (TSI) approaches. According to the study, we reveal that medicinal plant commodities in Central Java province have average score 8.52, indicating a strong comparative advantage in global markets, while the commodities appear to have average score of 0.97 at 0 to 1 range, representing a strong competitiveness. Those results are attributed to natural and environmental condition, as well as high demand of global market. This competitiveness will encourage traditional/modern medicinal industries in global market.