Which revealed comparative advantage index to choose? Theoretical and empirical considerations

1 Dec 2022 | Publication

Work area(s)

International trade and integration

Topic(s)

Economic indicators and projections International trade Trade policy and trade agreements

Which revealed comparative advantage index to choose? Theoretical and empirical considerations

  • Publication type: CEPAL Review
  • Author: Stellian, Rémi; Danna-Buitrago, Jenny Paola
  • Physical description: páginas. 45-6
  • UN symbol (Signature): LC/PUB.2022/24-P
  • Date: 1 December 2022
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Abstract

This article proposes guidelines for choosing an index of revealed comparative advantages (RCA) to analyse a given configuration of countries, products and periods. Following a systematic review of the main theoretical strengths and weaknesses inherent in RCA indices, a standardized method is designed to gauge the quality of their empirical measurement. This method is illustrated for Colombia and the Northern Triangle. The guidelines formalize a number of theoretical and empirical trade-offs that need to be weighed to provide a better basis for choosing an RCA index.

SDG(s)

17. Partnership for the goals