The granular and fundamental components of export specialization

Juan de Lucio, Raúl Mínguez, Asier Minondo () and Francisco Requena Silvente
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Raúl Mínguez: Universidad Nebrija. Calle de Santa Cruz de Marcenado, 27, 28015, Madrid (Spain).

No 1704, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: Countries' export specialization patterns are often caused by the behavior of very few firms. We propose an easy-to-implement methodology to decompose export specialization into fundamental comparative advantage (a country-specific component) and granular comparative advantage (a firm-specific component). We apply this methodology to analyze export specialization across countries and across regions within a country. In the country-level analysis, we find that, on average, granular comparative advantage leads to export specialization in 29% of industries, which account for 47% of total exports. We also show that 60% of the variation in export specialization across countries is explained by granular comparative advantage. The contribution of firms to export specialization is more important across regions within a country than across countries.

Keywords: exports; fundamental comparative advantage; granular comparative advantage; European Union; Spain; regions; export superstars; firm-level data (search for similar items in EconPapers)
JEL-codes: F12 F14 (search for similar items in EconPapers)
Date: 2017-04
New Economics Papers: this item is included in nep-int
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