COMPARATIVE ADVANTAGES AND COMPETITIVENESS: EVIDENCE FROM TRADE OF BOSNIA AND HERZEGOVINA WITH ITS MAIN PARTNERS

Snjezana Brkic ()
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Snjezana Brkic: University of Sarajevo

Economic Thought and Practice, 2020, vol. 29, issue 1, 137-155

Abstract: The paper analyzes revealed comparative advantages and international competitiveness of Bosnia and Herzegovina (BiH) in trade with its main partners between 2008 and 2017. By comparing results of two different concepts of success in trade, the paper aims to identify characteristics of BiH position in its most important bilateral trade relations. Several indicators of international specialization and competitiveness at macro and meso level are employed, such as Balassa index of revealed comparative advantage (RCA), trade balance and the difference between export and import price units. Research results indicate that position of BiH in bilateral trade should be improved: revealed comparative advantage exists only in trade with Serbia, import dominates in one-way flows, while trade categories representing unsuccessful price and quality competition of BiH industries prevail in two-way matched trade. The analysis discovered some structural shift in terms of increasing shares of categories with successful competition in trade with all trading partners. The test of consistency between RCA index and two-dimensional international competitiveness measures indicated more consistent results when comparing revealed comparative disadvantage to unsuccessful competition.

Keywords: revealed comparative advantage (RCA); international competitiveness; price competition; quality competition; Bosnia and Herzegovina (BiH) (search for similar items in EconPapers)
JEL-codes: F10 F14 L60 O52 (search for similar items in EconPapers)
Date: 2020
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