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An Examination of Nepal's Export Choice based on Revealed Comparative Advantage

Author

Listed:
  • Nimesh Salike

    (International Business School Suzhou, Xi’an Jiaotong-Liverpool University, Suzhou, China)

  • Benli Lu

    (University of Liverpool Management School, University of Liverpool, UK)

Abstract

This paper examines the comparative advantage of a selection of 27 Nepal's export products, of which 16 are extracted from the Nepal Trade Integration Strategy (NTIS 2010) list of potential priority exports. The primary purpose of this study is to investigate if these priority export products are in alignment with the concept of comparative advantage. Balassa's revealed comparative advantage (RCA) index is used as the methodology for analysis while the data used spans from 2000 to 2011. Empirical results show that out of the 16 NTIS 2010 potential priority exports, only 10 are products which Nepal has comparative advantage in producing, major ones being pashmina, wool and agro food products. The findings also reveal that there are at least three other products- carpets, textile and juice that Nepal poses high RCA indices but are not included under NTIS 2010 priority list.

Suggested Citation

  • Nimesh Salike & Benli Lu, 2015. "An Examination of Nepal's Export Choice based on Revealed Comparative Advantage," NRB Economic Review, Nepal Rastra Bank, Economic Research Department, vol. 27(1), pages 75-89, April.
    • Handle: RePEc:nrb:journl:v:27:y:2015:i:1:p:75
    as

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    References listed on IDEAS

    as
    1. Subash Acharya, 2013. "A Panel Data Analysis of Foreign Trade Determinants of Nepal: Gravity Model Approach," NRB Economic Review, Nepal Rastra Bank, Research Department, vol. 25(1), pages 1-20, April.
    2. Acharya, Sanjaya & Hölscher, Jens & Perugini, Cristiano, 2012. "Trade liberalisation and inequalities in Nepal: A CGE analysis," Economic Modelling, Elsevier, vol. 29(6), pages 2543-2557.
    3. Bhubanesh Pant Ph.D. & Rajan Krishna Panta, 2009. "Export Diversification and Competitiveness: Nepal’s Experiences," NRB Economic Review, Nepal Rastra Bank, Research Department, vol. 21, pages 52-78, April.
    4. Surya Bahadur Thapa, 2012. "Nepal's Trade Flows: Evidence from Gravity Model," NRB Economic Review, Nepal Rastra Bank, Economic Research Department, vol. 24(1), pages 16-27, April.
    5. Surya Bahadur Thapa, 2012. "Nepal's Trade Flows: Evidence from Gravity Model," NRB Economic Review, Nepal Rastra Bank, Research Department, vol. 24(1), pages 16-27, April.
    6. Subash Acharya, 2013. "A Panel Data Analysis of Foreign Trade Determinants of Nepal: Gravity Model Approach," NRB Economic Review, Nepal Rastra Bank, Economic Research Department, vol. 25(1), pages 1-20, April.
    7. Bhubanesh Pant, Ph.D. & Rajan Krishna Panta, 2009. "Export Diversification and Competitiveness: Nepal’s Experiences," NRB Economic Review, Nepal Rastra Bank, Economic Research Department, vol. 21, pages 1-3, April.
    8. Bhubanesh Pant Ph. D., 2005. "Nepal's Trade Sector: Review, Repercussions and Recommendations," NRB Economic Review, Nepal Rastra Bank, Research Department, vol. 17, pages 86-112, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Nepal; Revealed Comparative Advantage (RCA); Export; Nepal Trade Integration Strategy (NTIS);
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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