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Comparative Advantage Patterns and Domestic Determinants in Emerging Countries: An Analysis with a Focus on Technology

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Marconi, Daniela
Rolli, Valeria

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Abstract

During the last two decades a number of emerging economies have become deeply engaged in technology-intensive production. This has been reflected in their international trade specialization shifting from labour-intensive goods towards capital-intensive ones, and in rapid productivity gains across all manufacturing activities. The paper investigates for a sample of sixteen emerging countries, the linkages between the pattern of revealed comparative advantages (RCAs), captured by a modified version of the Lafay index of international trade specialization, and the competitiveness structure of the domestic manufacturing sector, measured by a set of industry and country-specific variables. Positive and large RCAs are found to be associated with low unit labour costs in both low-technology (high labour-intensive) and medium- or high tech sectors. On the other hand, domestic accumulation of physical capital is associated with positive and large RCAs in medium- or high technology sectors. The international disadvantage (negative RCAs) in technology-intensive production tends to deepen for countries with low human capital, whereas it diminishes for countries with large domestic markets importing technology through foreign capital goods.

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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Papers with number RP2008/81.

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Length: 38 pages
Date of creation: 2008
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Handle: RePEc:unu:wpaper:rp2008-81

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Keywords: revealed comparative advantages; technological up-grading;

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