Reassessing EU comparative advantage: The role of technology

Filippo Di Mauro, Marco Matani and Gianmarco Ottaviano

No 2/2024, IWH-CompNet Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: Based on the sufficient statistics approach developed by Huang and Ottaviano (2024), we show how the state of technology of European industries relative to the rest of the world can be empirically assessed in a way that is simple in terms of computation, parsimonious in terms of data requirements, but still comprehensive in terms of information. The lack of systematic cross-industry correlation between export specialization and technological advantage suggests that standard measu-res of revealed comparative advantage only imperfectly capture a country's tech-nological prowess due to the concurrent influences of factor prices, market size, markups, firm selection and market share reallocation.

Keywords: comparative advantage; European cross-country data; firm heterogeneity; international trade; monopolistic competition; multi-product firms; productivity (search for similar items in EconPapers)
JEL-codes: B17 C19 C51 C80 D21 D43 F02 F12 F14 F61 L13 L25 O49 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-eec and nep-int
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Working Paper: Reassessing EU comparative advantage: The role of technology (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwhcom:308809

DOI: 10.18717/cdpt8ha-1573

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