Revisiting the Latency, International Competitiveness, and Sectoral Composition of Trade: Empirical Evidence from CASA

Nassir Wani

Chapter Chapter 8 in Trade and Development in Central and South Asia, 2025, pp 161-196 from Springer

Abstract: Abstract This chapter examines trade dynamics, international competitiveness, comparative advantage, and sectoral specialisation of CASA using four indicators of the revealed comparative advantage, including the trade possibility method, for 2005–2022. Furthermore, the study also assesses the latency of comparative advantage and ascertains the stability and durability of the distribution and value of trade specialisation indices over time. The study prefers to calculate RCA based on overall trade flows rather than bilateral ones, and thus helps in assessing the stability of a country’s trade specialisations, and consequently equips in comprehending index stability over time to evaluate potential structural changes at the industry level and capture the extent of mobility in specialised patterns. This explicitly quantifies the extent of movement throughout the whole array of RCA indices and enables direct comparison across different periods. An intriguing supplementary method to assess the evolution of export competitiveness is by examining the duration of disclosed comparative advantage. The research analyses the length and likelihood of sustained export competitiveness to examine the duration of comparative advantage based on the trade possibilities approach. The findings suggest that CASA’s comparative advantage has changed to an extent in the past decade, as demonstrated by the Balassa (B) index. The survival function indicates that the durations of comparative advantage are not sustained for extended periods within the observed timeframe. The continual decline in the survival index of specific product groups suggests that CASA is more vulnerable to competition from overseas markets. The evolving competitive landscape in CASA reveals a clear transformation, underscored by a diminishing comparative advantage that once characterised its market dynamics. The Balassa index highlights this shift, indicating that the periods of notable comparative advantage have become less pronounced. As competition from external markets intensifies, survival probabilities for specific product categories are on the decline, suggesting that local producers must adapt to an increasingly challenging environment. This complicated situation needs a fresh look at strategy and new ideas to get through a market that isn’t defined by old advantages. Businesses in CASA should seize new opportunities and make themselves stronger against pressures from outside their borders.

Keywords: CASA; Revealed comparative advantage; International Competitiveness; Mobility Index; F05; F09; F11; F13; F15 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-95-2728-1_8

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DOI: 10.1007/978-981-95-2728-1_8

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