A simple cross-country index of trade specialization

João Amador, Sónia Cabral, José R. Maria

Research output: Contribution to journalArticle

6 Citations (Scopus)

Abstract

We propose a cross-country specialization index - the B{star operator} - defined as the share of a given product in total country's exports "normalized" by the average share across all countries. This indicator draws from the Revealed Comparative Advantage index suggested by Balassa (Manch Sch Econ Soc Stud 33(2):99-123, 1965), but its dynamic and cardinal properties are more suitable to perform a cross-country analysis over time. This feature is illustrated with a simple two-country by two-product stylized example and complemented with empirical evidence derived from 79 countries/groups of countries and four distinct technological sectors since the late sixties. We also provide empirical evidence on the external shape of the distribution of the B{star operator} and on its intra-distribution dynamics in different technological sectors. The results indicate that the overall degree of specialization is higher for high-tech exports than for low-tech exports. From a dynamic point of view, there is evidence of significant persistence of the cross-country export patterns.

Original languageEnglish
Pages (from-to)447-461
Number of pages15
JournalOpen Economies Review
Volume22
Issue number3
DOIs
Publication statusPublished - 1 Jul 2011

Keywords

  • Balassa index
  • Export specialization
  • International trade

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