IDEAS home Printed from https://ideas.repec.org/p/muc/wpaper/201286.html
   My bibliography  Save this paper

Analyzing the international competitiveness of the industry in Portugal, Ireland, Greece and Spain using revealed comparative advantages (RCA) indicators

Author

Listed:
  • Jens Oelgemoeller

Abstract

This paper sheds light on the export structure of the four European countries Portugal, Ireland, Greece and Spain, the so called PIGS countries. These countries were all hit by the economic downturn in the course of the financial crisis and have been struggling with the national debt crisis and recession. One way to identify sectoral international competitiveness is provided by the revealed comparative advantage index developed by Balassa (RCA 1). This indicator evolved through several studies, for example by the German council of experts (RCA 2). Both indicators suggest that the dominant advantages of Portugal and Greece can be found within agriculture and natural resources. The dominant export sectors are also located there. Ireland stands out from the other PIGS, as high-tech and medical/chemical products occur in the top sectors. Spain’s top export sectors do not have the competitiveness that one might expect. Furthermore, the Balassa-Index is transformed to a standardized and symmetric index RSCA, which has values ranging from minus one to plus one and is plotted against the trade balance index (TBI). Thus, information on country trade structure can be depicted. Ireland is to a certain extent dependent on the world market, without having a sound national industry as a basis. Gaining from the global economy through export growth will not have a major impact in Greece and Portugal. Spain does have competitive sectors and a degree of specialization, but the most important sectors are less competitive. Finally, the level of specialization (ß–specialization) and the specialization-process (s–specialization) are identified by a short OLS-estimation. The ß-specialization does not indicate high degrees of specialization in those countries. According to the s-specialization, there do not seem to be significant specialization or de-specialization trends since 1995.

Suggested Citation

  • Jens Oelgemoeller, "undated". "Analyzing the international competitiveness of the industry in Portugal, Ireland, Greece and Spain using revealed comparative advantages (RCA) indicators," Working Papers 201286, Institute of Spatial and Housing Economics, Munster Universitary.
    • Handle: RePEc:muc:wpaper:201286
    as

    Download full text from publisher

    File URL: http://www.wiwi.uni-muenster.de/cawm/forschen/Download/Diskbeitraege/CAWM_DP_61_RCA_PIGS.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. João Amador & José R. Maria & Sónia Cabral, 2007. "International Trade Patterns over the Last Four Decades: How does Portugal Compare with other Cohesion Countries?," Working Papers w200714, Banco de Portugal, Economics and Research Department.
    2. Belay Seyoum, 2007. "Revealed comparative advantage and competitiveness in services," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 34(5), pages 376-388, October.
    3. João Amador & José R. Maria & Sónia Cabral, 2007. "Export Specialization Over the Last Four Decades: How Does Portugal Compare With Other Cohesion Countries?," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    4. Harry Bowen, 1985. "On measuring comparative advantage: A reply and extension," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 121(2), pages 351-354, June.
    5. Karl Aiginger, 2000. "Specialisation of European Manufacturing," Austrian Economic Quarterly, WIFO, vol. 5(2), pages 81-92, May.
    6. Lee, Jim, 2011. "Export specialization and economic growth around the world," Economic Systems, Elsevier, vol. 35(1), pages 45-63, March.
    7. Keld Laursen, 1998. "Revealed Comparative Advantage and the Alternatives as Measures of International Specialisation," DRUID Working Papers 98-30, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    8. Matthes, Jürgen, 2006. "Deutschlands Handelsspezialisierung auf forschungsintensive Güter," IW-Trends – Vierteljahresschrift zur empirischen Wirtschaftsforschung, Institut der deutschen Wirtschaft (IW) / German Economic Institute, vol. 33(3), pages 31-43.
    9. Bent Dalum & Keld Laursen & Gert Villumsen, 1998. "Structural Change in OECD Export Specialisation Patterns: de-specialisation and 'stickiness'," International Review of Applied Economics, Taylor & Francis Journals, vol. 12(3), pages 423-443.
    10. Thomas Vollrath, 1991. "A theoretical evaluation of alternative trade intensity measures of revealed comparative advantage," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 127(2), pages 265-280, June.
    11. Jeroen Hinloopen & Charles Marrewijk, 2001. "On the empirical distribution of the Balassa index," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 137(1), pages 1-35, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oelgemöller, Jens, 2012. "Analyzing the international competitiveness of the industry in Portugal, Ireland, Greece and Spain using revealed comparative advantages (RCA) indicators," CAWM Discussion Papers 61, University of Münster, Münster Center for Economic Policy (MEP).
    2. Dominika Choros-Mrozowska, 2020. "Changes and Comparisons in Pattern of Polish Chinese Trade within the “16+1” Format," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 327-342.
    3. Amador, João & Cabral, Sónia & Ramos Maria, José, 2007. "International Trade Patterns over the Last Four Decades: How does Portugal Compare with other Cohesion Countries?," MPRA Paper 5996, University Library of Munich, Germany.
    4. Iglesias, Matias Nehuen, 2021. "Measuring size distortions of location quotients," International Economics, Elsevier, vol. 167(C), pages 189-205.
    5. Kaveri Deb & Bodhisattva Sengupta, 2017. "On Empirical Distribution of RCA Indices," IIM Kozhikode Society & Management Review, , vol. 6(1), pages 23-41, January.
    6. Andrey A. Gnidchenko & Vladimir A. Salnikov, 2015. "Net Comparative Advantage Index: Overcoming the Drawbacks of the Existing Indices," HSE Working papers WP BRP 119/EC/2015, National Research University Higher School of Economics.
    7. Ufuk Gunes Bebek, 2011. "Robustness of the Proposed Measures of Revealed Comparative Advantage," Studies in Economics 1121, School of Economics, University of Kent.
    8. M A Cole & R J R Elliott & K Shimamoto, 2003. "US Specialization in Pollution-Intensive Industries: Factor Intensities versus Environmental Regulations," Economics Discussion Paper Series 0321, Economics, The University of Manchester.
    9. Viet V. Hoang, 2019. "Investigating the evolution of agricultural trade specialization in transition economies: A case study from Vietnam," The International Trade Journal, Taylor & Francis Journals, vol. 33(4), pages 361-378, July.
    10. Kaveri Deb & Bodhisattva Sengupta, 2018. "Value-Added Trade and Empirical Distributions of RCA Indices," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 16(1), pages 235-264, March.
    11. Ferto, Imre & Hubbard, Lionel J., 2003. "The Dynamics Of Agri-Food Trade Patterns - The Hungarian Case," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25851, International Association of Agricultural Economists.
    12. Beňo, Michal, 2021. "E-working: Country Versus Culture Dimension," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 13(2), June.
    13. Martin Grančay & Tomáš Dudáš, 2019. "Bilateral trade flows and comparative advantage: does the size matter?," Society and Economy, Akadémiai Kiadó, Hungary, vol. 41(4), pages 397-413, December.
    14. Umar Fachrudin & Fithra Faisal Hastiadi, 2016. "Impact Analysis of Normalized Revealed Comparative Advantageon ASEAN’s Non-Oil and Gas Export Pattern Using Gravity-Model Approach," Working Papers in Economics and Business 201603, Faculty of Economics and Business, University of Indonesia, revised May 2016.
    15. João Amador & Sónia Cabral & José Maria, 2011. "A Simple Cross-Country Index of Trade Specialization," Open Economies Review, Springer, vol. 22(3), pages 447-461, July.
    16. Alex Hoen & Jan Oosterhaven, 2006. "On the measurement of comparative advantage," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 40(3), pages 677-691, August.
    17. Tri WIDODO, 2009. "Comparative Advantage: Theory, Empirical Measures And Case Studies," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 4, pages 57-82, November.
    18. Fertő, Imre & Hubbard, Lionel J., 2005. "Az agrárkereskedelem dinamikája - A csatlakozó országok esete [The dynamics of agri-food trade patterns - the accession countries case]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 24-38.
    19. Junshi Li & Yao Pan, 2023. "EU and China’s comparative advantage, trade complementarity and trade specialization dynamics in agricultural products," Asia Europe Journal, Springer, vol. 21(3), pages 351-379, September.
    20. Waqar Akhtar & M. Sharif & Hassnain Shah, 2009. "Competitiveness of Pakistani Fruits in the World Market," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 14(2), pages 125-133, Jul-Dec.

    More about this item

    Keywords

    Revealed Comparative Advantages; Trade Specialization; Product Mapping; PIGS;
    All these keywords.

    JEL classification:

    • F - International Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:muc:wpaper:201286. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Norbert Hiller (email available below). General contact details of provider: https://edirc.repec.org/data/ismuede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.