The granular and fundamental components of export specialization
Juan de Lucio (),
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
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)
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Persistent link: https://EconPapers.repec.org/RePEc:eec:wpaper:1704
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