Seminario 17/03: – Asier Minondo Uribe-Etxeberria (U. Deusto) – The contribution of fundamental and granular comparative advantage to export specialization

Información

Abstract:

Neoclassical models of international trade do not grant firms any role in shaping countries’ export specialization. However, the evidence shows that in many countries few firms dominate sectoral exports. In this paper we propose an easy-to-implement methodology to determine the contribution of country-level variables, fundamental comparative advantage, and firm-level variables, granular comparative advantage, to the variation in export specialization across industries. We implement this methodology using Spanish regional exports in 2014. We find that fundamental comparative advantage explains, on average, 58% of the differences in export specialization across regions and granular comparative advantage explains the remaining 42% of these differences. These findings highlight that individual firms play a very important role in defining export specialization.