Working Paper: NBER ID: w7212
Authors: J. David Richardson; Chi Zhang
Abstract: We map United States comparative advantage between 1980 and 1995, by trading partner and region, using Balassa's export-based index of Revealed Comparative Advantage (RCA). We find: temporally stable and ubiquitous US comparative advantage in differentiated producer goods (except disadvantage in Japan); somewhat less stable and less sweeping US disadvantage in standardized producer goods; chaotic and diverse patterns of US RCA in consumer goods (especially in the Chinese market). Our most significant findings are surprisingly sharp geographical differences in patterns of US RCA and surprisingly small differences across sub-sectors of 1, 2, and 3-digit SITC classifications - regional, but not sectoral, niche' specialization. The high overall variability across regions in RCA indexes seems unrelated to obvious explanations such as proximity or lingual/historical ties to the US. In producer goods, RCA variability across regions correlates somewhat better with accounts of trade diversion and of regional preferences for and discrimination against US exports. We find only scant evidence of high or increasing variability across disaggregated commodity sub-groups in US RCA indexes. Such variability is often the prediction of theories of comparative advantage that are based on vertical specialization, product differentiation, or scale and agglomeration economies.
Keywords: No keywords provided
JEL Codes: F1; F17
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Proximity to trade partners (F10) | US comparative advantage in exports to the western hemisphere (F14) |
| Proximity to trade partners (F10) | US comparative disadvantage in exports to Asia (F14) |
| Per capita income (D31) | US comparative advantage in poorer countries (F14) |
| Product differentiation (L15) | US comparative advantage in differentiated producer goods (F14) |
| Trade policies and regional characteristics (F13) | Variability in RCA indexes across regions (R12) |
| Sectoral specialization (L52) | Comparative advantage (F11) |