China's local comparative advantage

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China's local comparative advantage
James Harrigan
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Last edited by MARC Bot
December 22, 2020 | History

China's local comparative advantage

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"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"--National Bureau of Economic Research web site.

Publish Date
Language
English

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Cover of: China's local comparative advantage
China's local comparative advantage
2008, National Bureau of Economic Research
Electronic resource in English

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Book Details


Edition Notes

Title from PDF file as viewed on 7/2/2008.

Includes bibliographical references.

Also available in print.

System requirements: Adobe Acrobat Reader.

Mode of access: World Wide Web.

Published in
Cambridge, MA
Series
NBER working paper series -- working paper 13963, Working paper series (National Bureau of Economic Research : Online) -- working paper no. 13963.

Classifications

Library of Congress
HB1

The Physical Object

Format
Electronic resource

ID Numbers

Open Library
OL17087770M
LCCN
2008610810

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December 22, 2020 Edited by MARC Bot import existing book
December 10, 2009 Created by WorkBot add works page