Economics at your fingertips  

Unpacking sources of comparative advantage: A quantitative approach

Davin Chor ()

Journal of International Economics, 2010, vol. 82, issue 2, 152-167

Abstract: This paper develops an approach for quantifying the importance of different sources of comparative advantage, by extending the Eaton and Kortum (2002) model to predict industry trade flows. In this framework, comparative advantage is determined by the interaction of country and industry characteristics, with countries specializing in industries whose production needs they can best meet with their factor endowments and institutional strengths. I estimate the model parameters using: (i) OLS; and (ii) a simulated method of moments procedure that accounts for the prevalence of zeros in the bilateral trade data. I apply the model to explore various quantitative questions, such as how much distance, Ricardian productivity, factor endowments, and institutions each matter for country welfare in the global trade equilibrium.

Keywords: Comparative; advantage; Gravity; Ricardian; model; Factor; endowments; Institutional; determinants; of; trade; Simulated; method; of; moments (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (200) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Unpacking Sources of Comparative Advantage: A Quantitative Approach (2008) Downloads
Working Paper: Unpacking Sources of Comparative Advantage: A Quantitative Approach (2008) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Journal of International Economics is currently edited by Gourinchas, Pierre-Olivier and Rodríguez-Clare, Andrés

More articles in Journal of International Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2022-08-15
Handle: RePEc:eee:inecon:v:82:y:2010:i:2:p:152-167