Comparative advantage patterns and domestic determinants in emerging countries: an analysis with a focus on technology

Daniela Marconi () and Valeria Rolli ()
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Valeria Rolli: Bank of Italy, Economic Research epartment

No 638, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research Department

Abstract: During the last two decades a number of emerging economies have become deeply engaged in technology-intensive production. This has been reflected in a shift in their international trade specialization from labor-intensive towards capital-intensive goods and in rapid productivity gains across all manufacturing activities. The paper draws on a sample of sixteen emerging countries to investigate the linkages between the pattern of revealed comparative advantages (RCAs), captured by a modified version of the Lafay index of international trade specialization, and the competitiveness structure of the domestic manufacturing sector, measured by a set of industry and country-specific variables. Positive and large RCAs are found to be associated with low unit labor costs in both low-technology (labor-intensive) and medium-or-high tech sectors; on the other hand, domestic accumulation of physical capital is associated with positive and large RCAs in medium-or-high tech sectors. The international disadvantage (negative RCAs) in technology-intensive production tends to increase for countries with low human capital, whereas it diminishes for countries that have large domestic markets and import technology through foreign capital goods.

Keywords: Revealed comparative advantages; technological up-grading (search for similar items in EconPapers)
JEL-codes: F14 O10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse, nep-ino and nep-int
Date: 2007-09
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