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Optimizing the Structure of Mongolian Foreign Trade and the Alternative Policy of Successful Transition

Author

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  • Byambasuren, Tsenguunjav
  • Gochoo, Munkh-Erdene

Abstract

This paper aims to make an alternative development policy which can encourage the foreign trade efficiency. In order to make the policy, the current situation of Mongolian Foreign Trade has been determined and invented the product sectors that have a chance to be developed for the further. In this paper, several methods such as Revealed Comparative Advantage (RCA) method, Product Space Analysis or Monkey and Tree Model, Opportunity Index, and Gravity Model have been used to make analysis. The paper illustrates that firstly, Mongolian Foreign Trade has been becoming more dependent from a single country, a single product and there is no structural shift. In other words, the most part of Mongolian export goods consist of the products that have low sophistication level and low value added, and based on natural resources. Also, the diversification of export goods basket is poor and even no unique products are included in the basket. Therefore, this paper suggests an alternative development policy based on Hidalgo, Ricardo Hausmann, and Bailey Klinger’s policy recommendations and foreign trade policy experience of China whose economic performance was the best in the world last 30 years.

Suggested Citation

  • Byambasuren, Tsenguunjav & Gochoo, Munkh-Erdene, 2015. "Optimizing the Structure of Mongolian Foreign Trade and the Alternative Policy of Successful Transition," MPRA Paper 61803, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:61803
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    References listed on IDEAS

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    1. Bergstrand, Jeffrey H, 1985. "The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 474-481, August.
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    Cited by:

    1. Neelofar Rashid & Mohammad Afzal Mir, 2022. "A Study on the Trade Relationship between China & Mongolia: With Special Focus on Revealed Comparative Advantage (RCA)," Shanlax International Journal of Economics, Shanlax Journals, vol. 11(1), pages 37-45, December.

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    More about this item

    Keywords

    Revealed Comparative Advantage (RCA); Product space model; Structural transformation;
    All these keywords.

    JEL classification:

    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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