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Article
Publication date: 6 March 2007

Peter Kilduff and Ting Chi

This paper aims to present an exploratory investigation into ten‐year (1995‐2004) patterns of trade specialization among Eastern European and former Soviet Union Nations…

2264

Abstract

Purpose

This paper aims to present an exploratory investigation into ten‐year (1995‐2004) patterns of trade specialization among Eastern European and former Soviet Union Nations, assessing patterns of comparative advantage across the textile machinery, man‐made fiber, textile, and apparel sectors of the textile complex to determine whether these conform with both trade specialization and industry evolution theories.

Design/methodology/approach

A revealed symmetric comparative advantage index is employed to evaluate international competitiveness for 27 Eastern European and former Soviet Union Nations over a ten‐year period. Repeated measures ANOVA is used to determine the significance of the observed patterns across four income‐defined groups of nations.

Findings

Overall, the pattern of export development and RSCA generally reflects expectations regarding factor proportions theory and industry evolution models. The RMANOVA partially confirms the observations. The analysis indicates that income group does not independently affect comparative advantage; however, the nature of products is the significant factor influencing national comparative advantage.

Practical implications

The established models may be better at understanding those nations which have established relatively stable politic and economic environment, and been experiencing earlier stages of industry development, but appear less useful in predicting development patterns for those nations experiencing dramatic transitions from regulated to de‐regulated markets.

Originality/value

The patterns of national comparative advantage in a vertical textile complex are identified for Eastern European and former Soviet Union Nations. The dynamics of change over a ten‐year period following economic reforms are revealed.

Details

Journal of Fashion Marketing and Management: An International Journal, vol. 11 no. 1
Type: Research Article
ISSN: 1361-2026

Keywords

Article
Publication date: 12 September 2016

Jaeho Lee and Yong Joon Jang

The purpose of this paper is to argue that comparative advantage of host country’s industry can be one of the significant determinants of the decision on mergers and…

1380

Abstract

Purpose

The purpose of this paper is to argue that comparative advantage of host country’s industry can be one of the significant determinants of the decision on mergers and acquisitions (M&A) or greenfield in foreign direct investment (FDI).

Design/methodology/approach

The authors extract five-related properties of an industry with comparative advantage in a host nation from Bernard et al.’s (2007) international trade model with heterogeneous firms and attempt to empirically test their roles in a multinational enterprise’s (MNE) M&A or greenfield investment decision, using the inward FDI data set in Korea from 1999 to 2006.

Findings

The theoretical framework finds that the five properties derived from an industry with comparative advantage in a host country have mixed motives for M&A or greenfield. The empirical results show that selected conventional independent variables generally affect the M&A or greenfield entry mode decision with significance individually and that their impacts become more or less prominent when the authors employ interaction terms combining them with comparative advantages in the industries.

Research limitations/implications

This implies that MNEs not only consider their own firm-specific advantages or other country-level factors for foreign market entries as the previous research generally found, but also seriously take into account industry-specific factors, especially industry-wide comparative advantages based on heterogeneous productivities of firms.

Originality/value

This paper reconciles multinationals’ strategic motives under an oligopolistic market with their efficiency gains under a monopolistic competitive market, which are considered as two main factors for cross-border M&A. Furthermore, this paper adds a new firm-level data set into entry mode research.

Details

Journal of Korea Trade, vol. 20 no. 3
Type: Research Article
ISSN: 1229-828X

Keywords

Article
Publication date: 22 March 2013

Lalit Mohan Kathuria

The textiles and clothing sector is one of India's most important economic sectors, next to the agriculture sector in terms of industrial output and employment, providing…

2685

Abstract

Purpose

The textiles and clothing sector is one of India's most important economic sectors, next to the agriculture sector in terms of industrial output and employment, providing employment to more than 30 million people. Many studies predict that India will get a significant share of the world textiles and clothing trade due to the advantage of cheap labor and other factor resources but India's slower growth rate, as compared to other low‐cost competitors, indicates otherwise. The purpose of this paper is to analyze the comparative advantage of India and Bangladesh for the clothing sector in the world export trade with the help of Balassa's index of Revealed Comparative Advantage (RCA). The study highlights the shift in comparative advantage for India and Bangladesh between two periods. The study also points out constraints restricting the growth of export share of India in world market and offers suggestions to policy makers for enhancing India's export share in the world clothing trade.

Design/methodology/approach

RCA indices have been calculated for various clothing product categories (under Harmonized System) up to four digit classification with the help of Balassa's relative measure for India and Bangladesh. Tables have been prepared for India and Bangladesh, highlighting products having comparatively higher revealed comparative advantage. For calculation of RCA indices, the export data have been taken from “UN Comtrade”, an electronic database of the United Nations and from the database of the World Trade Organization (WTO). Further, Spearman rank correlation coefficient has been calculated for analyzing the changes over the period 1995‐2003 for India and Bangladesh.

Findings

Findings reveal that the number of products for which India enjoyed the comparative advantage increased from 23 products to 25 products between 1995 and 2003 and for Bangladesh, this number increased from 21 products to 29 products between 1995 and 2003. Clothing exports of India and Bangladesh are classified on the basis of comparative advantage at the HS 4‐digit level for the years 1995 and 2003 and the comparative position is given on the basis of a measure of structural change in exports of India and Bangladesh. The products in which India and Bangladesh have comparative advantage in garment exports are highlighted.

Originality/value

This paper has calculated and compared revealed comparative advantage indices over a period of time up to four digits classification of HS product categories. Also, this paper highlights constraints, and offer suggestions which would be helpful to exporters and policy makers.

Details

Competitiveness Review: An International Business Journal, vol. 23 no. 2
Type: Research Article
ISSN: 1059-5422

Keywords

Article
Publication date: 29 July 2022

Ashpreet Sharma, Lalit Mohan Kathuria and Tanveen Kaur

Given the dominant share of India in global production of fruits and vegetables, this paper intends to analyze the export competitiveness of India and other major food…

Abstract

Purpose

Given the dominant share of India in global production of fruits and vegetables, this paper intends to analyze the export competitiveness of India and other major food exporters in the world trade. The purpose of this study is to examine export structure, substitutability and complementarity of selected fresh and processed fruits and vegetables of top ten food exporters for the period 2010-20.

Design/methodology/approach

Balassa’s (1965) revealed comparative advantage (RCA) index was used to measure RCA indices of selected fruits and vegetables under study. Also, revealed symmetric comparative advantage (RSCA) and normalized RCA (NRCA) indices have been calculated. Further, Spearman rank correlation coefficients were computed to analyze changes over the study period for India and other competing countries. The export data have been sourced from UN Comtrade, an electronic database of United Nations, as well as World Trade Statistical Review, a database of World Trade Organization. The analysis was undertaken at Harmonized System (HS) four-digit classification for the period 2010-20.

Findings

The results disclosed an improvement in India’s comparative advantage over the period of 2010-20 in HS 07 product category, whereas the advantage ceded to other competitive nations in HS 08 product category. Further, Spearman rank correlation coefficients revealed that India faces competition from countries like China, Indonesia, Brazil, Thailand, Argentina and European Union for HS 07 product category, while countries like Mexico, Indonesia, Brazil and Thailandare the major competitors of India in HS 08 product category.

Originality/value

The paper expands the existing agricultural trade literature in three ways. First, it is one of the very few studies that have analyzed RCA for Indian fresh and processed fruits and vegetables using three different types of indices, namely, Balassa’s RCA, RSCA and NRCA. Second, the authors provide a number of comparisons related to RCA for Indian fruits and vegetables with other top food exporters in the world for a period of 10 years (2010-20). Third, the authors contribute to agricultural trade literature by assessing the substitutability or complementarity of India in the export of fruits and vegetables with other competing nations by using Spearman rank correlation coefficients.

Details

Competitiveness Review: An International Business Journal , vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1059-5422

Keywords

Article
Publication date: 11 September 2017

Unjung Whang

The purpose of this paper is to emphasize the importance of product quality in differentiated-products markets in determining the structure of competition among firms.

1617

Abstract

Purpose

The purpose of this paper is to emphasize the importance of product quality in differentiated-products markets in determining the structure of competition among firms.

Design/methodology/approach

First, two distinct models of firm heterogeneity are considered as two possible structures for firms’ competition: “price competition” and “quality competition.” Then, the author exploits the bilateral trade data of the world’s 83 largest countries in order to examine a link between the empirical findings and the theoretical models.

Findings

The empirical findings support a model of “quality competition” rather than “price competition,” in which firms in a country with a comparative advantage in a given product tend to improve their product quality as opposed to lowering production costs, so they compete on the quality-adjusted price.

Research limitations/implications

This paper used product-level data to examine the spatial pattern of the average export unit value of a product, which is able to answer the question of whether an industry is involved with quality competition. The product-level data used in this study, however, are not ideally suitable for exploring the predictions of a heterogeneous firms’ trade model.

Originality/value

To the best of the author’s knowledge, this is the first paper that investigates a relationship between the country-product pair of comparative advantages and firms’ self-selection behavior in the product-level data to shed light on the role of product quality in determining the structure of firms’ competition.

Details

Journal of Korea Trade, vol. 21 no. 3
Type: Research Article
ISSN: 1229-828X

Keywords

Article
Publication date: 15 May 2017

Pornlapas Suwannarat

This study aims to fundamentally focus on the comparative advantage measurement and the trend of change in the international competitiveness of five Thai economic products…

Abstract

Purpose

This study aims to fundamentally focus on the comparative advantage measurement and the trend of change in the international competitiveness of five Thai economic products exporting to the People’s Republic of China during the first half of the 2010s via the analysis of the revealed comparative advantage (RCA) index and market share.

Design/methodology/approach

The RCA index has been computed to show the comparative advantages of the product to a certain extent: whether it is cost-effective to produce that product in a certain location compared to opportunity cost of the resources in producing that product. The data set of number and value of five important export products from Thailand to China during 2010-2013 has been obtained from the Thai Ministry of Commerce and Thai-Chinese Business Information Centre.

Findings

The study reveals that of these five important economic products, cassava has the highest comparative advantage and continues to have a rapid growth trend, whilst computer equipment and components have been shown to have comparative disadvantage and the lowest comparative advantage index scores.

Research limitations/implications

Measuring with various sophisticated indices may provide clearer results. Also, according to unavailability of data set, the four-year period may not be able to show the long-term trend of competitiveness. Future studies are encouraged to study in the longer-term period with numerous indices.

Practical implications

The research also provides policy implications and measures to develop each sector to enhance competitiveness.

Originality/value

This is the original attempt to use both indices to assess the competitiveness of important Thai exports to the Chinese market.

Details

Competitiveness Review: An International Business Journal, vol. 27 no. 3
Type: Research Article
ISSN: 1059-5422

Keywords

Article
Publication date: 4 September 2017

Jeremiás Máté Balogh and Attila Jámbor

Comparative advantage is an important indicator in the analysis of international trade flow; however, in empirical studies on agriculture it is often neglected. The…

1083

Abstract

Purpose

Comparative advantage is an important indicator in the analysis of international trade flow; however, in empirical studies on agriculture it is often neglected. The purpose of this paper is to analyse global comparative advantage in the European Union (EU) wine industry and to test the duration and stability of trade indices.

Design/methodology/approach

The paper applies the theory of comparative advantages by using the Balassa indices to European wine trade (based on the 16 biggest producers) data from the period 2000-2013. Moreover, it applies stability and duration analysis on comparative advantages calculated.

Findings

Results suggest that Bulgaria, Cyprus, France, Greece, Italy, Portugal, and Spain are the highest ranked European wine producers in the world market and have the largest comparative advantages. However, duration and stability tests indicate that trade advantages have weakened for the majority of these countries. The paper discusses a number of reasons for this downturn, including changes to Common Agricultural Policy wine regulation, economic crisis, and the rise of New World wine producers.

Originality/value

The originality of the paper is that it applies the theory of comparative advantage to top wine exporters in the EU. The paper also makes valuable contributions to the wine literature by analysing the duration and stability of comparative advantage in the global wine trade. Moreover, the identification of industry-specific causes for changing patterns in comparative advantage in the EU might be important to the wine industry.

Details

British Food Journal, vol. 119 no. 9
Type: Research Article
ISSN: 0007-070X

Keywords

Article
Publication date: 29 November 2018

Javeria Maryam, Umer Jeelanie Banday and Ashok Mittal

In the recent international scenario, the rise of emerging economies, in particular, Brazil, Russia, India, China and South Africa (BRICS) has gained ample of attention…

Abstract

Purpose

In the recent international scenario, the rise of emerging economies, in particular, Brazil, Russia, India, China and South Africa (BRICS) has gained ample of attention. The global trade flows of the BRICS countries have significantly increased during the last one-and-a-half decade. The purpose of this paper is to examine the intra-BRICS and BRICS–EU trade flows.

Design/methodology/approach

To study the intensity of trade among BRICS countries and with EU, the Trade Intensity Index is employed for the period 2001–2015. Balassa’s revealed comparative advantage (RCA) index is computed for the assessment of comparative advantages of exports by BRICS countries in the year 2015 in the global markets. A comparative analysis of export similarity is done for India and other BRICS countries in EU.

Findings

The findings of trade intensity showed large bilateral trade flows among BRICS member. Russia has emerged as the main trading partner with EU in BRICS. For the year 2015, the comparative study of RCA at HS-two digits and HS-four digits classification highlights marginal structural changes in the export composition of these countries. The analysis revealed that Brazil and Russia have comparative advantages in natural resource-based products, while India and China possessed comparative advantages in manufactured and processed products. The export similarity index shows the presence of competition between India and China in EU.

Practical implications

This paper highlights the need for closer cooperation to promote intra-BRICS trade and to make structural transformations in the basket of trading products by them to have trade benefits at large.

Originality/value

Numerous studies are available on bilateral trade of BRICS members. However, limited studies are available to get a holistic view of intra-BRICS trade. This paper is an attempt to examine the BRICS countries trade profile both at global levels and within the group.

Details

International Journal of Emerging Markets, vol. 13 no. 5
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 1 July 2022

Raka Saxena, Anjani Kumar, Ritambhara Singh, Ranjit Kumar Paul, M.S. Raman, Rohit Kumar, Mohd Arshad Khan and Priyanka Agarwal

The present study provides evidence on export advantages of horticultural commodities based on competitiveness, trade balance and seasonality dimensions.

Abstract

Purpose

The present study provides evidence on export advantages of horticultural commodities based on competitiveness, trade balance and seasonality dimensions.

Design/methodology/approach

The study delineated horticultural commodities in terms of comparative advantage, examined temporal shifts in export advantages (mapping) and estimated seasonality. Product mapping was carried out using the Revealed Symmetric Comparative Advantage (RSCA) and Trade Balance Index (TBI). Seasonal advantages were examined through a graphical approach along with the objective tests, namely, modified QS-test (QS), Friedman-test (FT) and using a seasonal dummy.

Findings

Cucumbers/gherkins, onions, preserved vegetables, fresh grapes, shelled cashew nuts, guavas, mangoes, and spices emerged as the most favorable horticultural products. India has a strong seasonal advantage in dried onions, cucumber/gherkins, shelled cashew nut, dried capsicum, coriander, cumin, and turmeric. The untapped potential in horticulture can be addressed by handling the trade barriers effectively, particularly the sanitary and phytosanitary issues, affecting the exports. Proper policies must be enacted to facilitate the investment in advanced agricultural technologies and logistics to ensure the desired quality and cost effectiveness.

Research limitations/implications

Commodity-specific studies on value chain analysis would provide valuable insights into the issues hindering exports and realizing the untapped export potential.

Originality/value

There is no holistic and recent study illustrating the horticulture export advantages covering a large number of commodities in the Indian context. The study would be helpful to the stakeholders for drawing useful policy implications.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2044-0839

Keywords

Article
Publication date: 15 July 2019

Zahra Saki, Marguerite Moore, Ivan Kandilov, Lori Rothenberg and A. Blanton Godfrey

The purpose of this study is to identify US textile and apparel (TAP) products and categories that demonstrate export comparative advantage and their respective country…

Abstract

Purpose

The purpose of this study is to identify US textile and apparel (TAP) products and categories that demonstrate export comparative advantage and their respective country destinations.

Design/methodology/approach

Revealed comparative advantage (RCA) and normalized revealed comparative advantage (NRCA) in the long term (1996-2016) and short term (2010-2016) using two-digit Harmonized Commodity Description and Coding System codes (HS codes) provide an insight into export advantage of TAP products. Non-parametric rank correlation (i.e. Spearman rank correlation) tests consistency between RCA and NRCA. Subsequently, NRCA using four-digit HS codes identify textile sub-categories with export comparative advantage. Bilateral trade data identify export destinations for sub-categories that indicate US export comparative advantage in the short term.

Findings

Aggregated product-level comparison of RCA and NRCA ranking indicates a consistent positive correlation between the two indices. The disaggregated findings reveal cotton fiber HS5201, artificial filament tow HS5502, non-wovens HS5603, cotton yarn HS5205, carpet and other floor coverings HS5703 and worn clothing HS6309 as sources of US TAP export advantage.

Originality/value

This research provides a comprehensive, current analysis of the US competitive position within the TAP global environment. Incorporation of NRCA into the study’s design demonstrates the flexibility of this measure in a new industry context.

Details

Competitiveness Review: An International Business Journal , vol. 29 no. 4
Type: Research Article
ISSN: 1059-5422

Keywords

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