Friday 9 May 2008

China's Local Comparative Advantage

An interesting new paper for trade economists. This relates to a number of papers I have written in this area.

I always have some concern when unit values are used for China but otherwise this appears to be an interesting paper.

------------------------------------------------------

"China's Local Comparative Advantage"

NBER Working Paper No. W13963

JAMES HARRIGAN, Federal Reserve Bank of New York, National Bureau of Economic Research (NBER)
Email: james.harrigan@ny.frb.org
HAIYAN DENG, The Conference Board
Email: haiyan.deng@conference-board.org

China's trade pattern is influenced not just by its overall comparative advantage in labor intensive goods but also by geography. We use two variants of the Eaton-Kortum (2002) model to study China's local comparative advantage. The theory predicts that China's share of export markets should grow most rapidly where China's share is initially large. A corollary is that exporters that have a big market share where China's share is initially large should see the largest fall in their market shares. These market share change predictions are strongly supported in the data from 1996 to 2006. We also show theoretically that since trade costs are proportional to weight rather than value, relative distance affects local comparative advantage as well as the overall volume of trade. The model predicts that China has a comparative advantage in heavy goods in nearby markets, and lighter goods in more distant markets. This theory motivates a simple empirical prediction: within a product, China's export unit values should be increasing in distance. We find strong support for this effect in our empirical analysis on product-level Chinese exports in 2006.

.

2 comments:

Anonymous said...

womens shox nz premium white sky blue cayman metallic silver 1112

womens shox nz premium white solar orange pearl grey 1110

nike womens shox nz sl white baltic blue 1125

nike womens shox r4 grunge edition 1145

nike womens shox r4 valentine edition 1144

nike womens shox r4 white clementine orange 1143

nike womens shox r4 white ice blue maize 1142

nike womens wmns shox nz birch anthracite bright cactus bronzed 1114

nike zoom kobe iii 3 all star edition white metallic gold varsity red maroon 1450

nike zoom kobe v pop playoff pack black chrome del sol varsity purple 1448

nike zoom lebron vi 6 low black black anthracite 1458

nike zoom soldier iii black black anthracite 1457

nike zoom soldier iii black white baltic blue 1459

original air jordan 12 playoff black white 239

original air jordan 14 xiv black black varsity red 258

original air jordan 14 xiv white black oxidized green 257

original air jordan 14 xiv white black varsity red 256

women air jordan 10 x retro white violet grey 205

Anonymous said...

womens air max 90 neo turq white 917

womens air max 90 neutral grey powder blue 916

womens air max 90 sanddrift cognac sienna 963

womens air max 90 varsity red varsity red white 914

womens air max 90 white ice blue midnight navy 1087

womens air max 90 white ice blue neutral grey 1073

womens air max 90 white laser pink varsity red team red 952

womens air max 90 white metallic silver 1072

womens air max 90 white perfect pink hazelnut 1086

womens air max 90 white pink ice white black 1085

womens air max 90 white pink ice 1071

womens air max 90 white pink mist pink ice 1070

womens air max 90 white pistachio ice blue 1084

womens air max 90 white red grey 1083

womens air max 90 white white black red plum 903

womens air max 90 white white black 943

womens air max 90 white white chilling red medium grey 900

womens air max 90 white white grand purple chilling red 906