Optimizing the Structure of Mongolian Foreign Trade and the Alternative Policy of Successful Transition

Tsenguunjav Byambasuren and Munkh-Erdene Gochoo

MPRA Paper from University Library of Munich, Germany

Abstract: This paper aims to make an alternative development policy which can encourage the foreign trade efficiency. In order to make the policy, the current situation of Mongolian Foreign Trade has been determined and invented the product sectors that have a chance to be developed for the further. In this paper, several methods such as Revealed Comparative Advantage (RCA) method, Product Space Analysis or Monkey and Tree Model, Opportunity Index, and Gravity Model have been used to make analysis. The paper illustrates that firstly, Mongolian Foreign Trade has been becoming more dependent from a single country, a single product and there is no structural shift. In other words, the most part of Mongolian export goods consist of the products that have low sophistication level and low value added, and based on natural resources. Also, the diversification of export goods basket is poor and even no unique products are included in the basket. Therefore, this paper suggests an alternative development policy based on Hidalgo, Ricardo Hausmann, and Bailey Klinger’s policy recommendations and foreign trade policy experience of China whose economic performance was the best in the world last 30 years.

Keywords: Revealed Comparative Advantage (RCA); Product space model; Structural transformation (search for similar items in EconPapers)
JEL-codes: C55 F14 F42 (search for similar items in EconPapers)
Date: 2015-02-02
New Economics Papers: this item is included in nep-int and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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