A cross country analysis of dynamics in comparative advantage and trade patterns in textiles and clothing

Wadud, Mokhtarul 2007, A cross country analysis of dynamics in comparative advantage and trade patterns in textiles and clothing, Labuan bulletin of internaitonal business and finance, vol. 5, pp. 1-22.

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Title A cross country analysis of dynamics in comparative advantage and trade patterns in textiles and clothing
Author(s) Wadud, Mokhtarul
Journal name Labuan bulletin of internaitonal business and finance
Volume number 5
Start page 1
End page 22
Publisher Universiti Malaysia Sabah
Place of publication Malaysia
Publication date 2007
ISSN 1675-7262
Keyword(s) Revealed Comparative Advantage
Textiles and Clothing
Grubel-Lloyd Index
Summary This paper examines pattern of comparative advantage in textiles and clothing trade as revealed by export shares of selected developed and developing economies. The estimated revealed comparative advantage (RCA) indices provided strong evidence of comparative advantage enjoyed by the developing economies. However, a few developed high income economies have enjoyed sustainable comparative advantage, especially in textiles trade. Significant negative correlations are observed between country specific income levels and the estimated absolute and relative RCA indices. While most of the developing economies achieved significant improvement of comparative advantage over time in clothing trade, the evidence is mixed for textiles. Additional evidence from Grubel-Lloyd (G-L) index of intra industry trade (IIT) suggest that global textiles trade could be mainly explained on the basis of product differentiation and economies of scale while clothing trade is more based on comparative advantage. Results of the study also suggest that the trading nations should engage in exploitation of forms of competition such as product differentiation in textiles trade, whereas for clothing, cost minimising remains a valid strategy.
Language eng
Field of Research 140210 International Economics and International Finance
HERDC Research category C1 Refereed article in a scholarly journal
HERDC collection year 2008
Persistent URL http://hdl.handle.net/10536/DRO/DU:30017716

Document type: Journal Article
Collection: School of Accounting, Economics and Finance
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