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Working Paper 359- Comparative Advantage and Growth Potential of the Democratic Republic of Congo

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Abstract

We use disaggregated trade data for the years 2014–2018 to identify the areas of revealed and latent comparative advantage of the Democratic Republic of Congo (DRC). We find that the DRC’s export basket is highly concentrated and dominated by products with low value-added and potential income that are derived from copper, cobalt, tin, diamonds, and oils. We identify a number of products that the DRC could easily develop given its areas of revealed comparative advantage, including machinery for filtering or purifying water, traffic control equipment, electrical apparatus, photographic laboratory equipment, and printing machinery. The development of such products can help the DRC achieve the dual goals of diversifying its exports and accelerating the structural transformation of its economy. Policymakers can use these products as a starting point to conceive adequate industrial and trade policies that pursue this dual goal.

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  • Rachidi Kotchoni & Franck M. Adoho, 2021. "Working Paper 359- Comparative Advantage and Growth Potential of the Democratic Republic of Congo," Working Paper Series 2485, African Development Bank.
    • Handle: RePEc:adb:adbwps:2485
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    References listed on IDEAS

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    1. Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2007. "What you export matters," Journal of Economic Growth, Springer, vol. 12(1), pages 1-25, March.
    2. Ricardo Hausmann & Bailey Klinger, 2007. "The Structure of the Product Space and the Evolution of Comparative Advantage," Growth Lab Working Papers 10, Harvard's Growth Lab.
    3. Hausmann, Ricardo & Klinger, Bailey, 2006. "Structural Transformation and Patterns of Comparative Advantage in the Product Space," Working Paper Series rwp06-041, Harvard University, John F. Kennedy School of Government.
    4. Balassa, Bela, 1979. "The Changing Pattern of Comparative Advantage in Manufactured Goods," The Review of Economics and Statistics, MIT Press, vol. 61(2), pages 259-266, May.
    5. Heiko Hesse, 2008. "Export Diversification and Economic Growth," World Bank Publications - Books, The World Bank Group, number 28040.
    6. C. A. Hidalgo & B. Klinger & A. -L. Barabasi & R. Hausmann, 2007. "The Product Space Conditions the Development of Nations," Papers 0708.2090, arXiv.org.
    7. Balassa, Bela, 1986. "Comparative Advantage in Manufactured Goods: A Reappraisal," The Review of Economics and Statistics, MIT Press, vol. 68(2), pages 315-319, May.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Economic Complexity; Export Sophistication; Latent Comparative Advantage; Product Space; Revealed Comparative Advantage; Trade JEL classification: F10; F14;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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