Revealed comparative advantages and regional specialization: Evidence from Colombia in the Pacific Alliance

Rémi Stellian, Jenny Danna-Buitrago

Research output: Contribution to journalArticlepeer-review

32 Scopus citations

Abstract

This paper is a methodological contribution to the calculation and use of Revealed Comparative Advantage (RCA) indexes. We first explain why the RCA index of Contribution to the Trade Balance (CTB) is theoretically relevant. However, as other RCA indexes might also be reliable measures of comparative advantages, we present standardized tools to compare RCA indexes computed for a given set of countries, products and periods. We illustrate with Colombia in the Pacific Alliance. In that case, the CTB index should be preferred to eight other representative RCA indexes. Therefore, the CTB index might be useful for empirical analysis, besides its theoretical relevance. Last, we suggest highlighting products that constitute strengths (weaknesses) for a country in international trade according to its ability to maintain through time the highest (lowest) CTB index compared with other countries. Again, we illustrate with Colombia in the Pacific Alliance and discuss implications for Colombian economic policy.

Original languageEnglish
Pages (from-to)349-379
Number of pages31
JournalJournal of Applied Economics
Volume22
Issue number1
DOIs
StatePublished - 01 Jan 2019

Keywords

  • Colombia
  • Pacific Alliance
  • Revealed comparative advantage
  • regional specialization

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