Trade dynamics, revealed comparative advantage, and international competitiveness: Evidence from Macedonia

Abstract

This paper examines the sectoral specialisation and competitiveness of Macedonia in relation to that of the EU28, using four indices of revealed comparative advantage for the years 2000-2015. Additionally, we estimate the stability of the distribution and of the value of trade specialisation indices over time, as well as the duration and probability of the long-term survival of continuing export competitiveness. The findings suggest that the structure of Macedonia's comparative advantage has changed somewhat over the past few years, and there is also evidence of a weakening in the level of comparative advantage as revealed by the Balassa (B) index. The comparisons made between the implied (theoretically derived) probability distributions and their empirical counterparts demonstrate that the Markov transition probabilities accurately characterise the data-generating process that highlights the distributions of the B index, and thus allow for obtaining a precise prediction about the probability distribution vectors, including the limiting distribution. Finally, the results of estimating the survival function show that the survival times of revealed comparative advantage are not persistent over the period observed. The continuous decline in the chance of certain product groups surviving indicates that Macedonia is becoming increasingly vulnerable to competition from other markets.KEY WORDS: revealed comparative advantage, Markov chain model, mobility index, survival analysis

Core-periphery structure in sectoral international trade networks: A new approach to an old theory

“…In order to examine more homogenous structures, the two-digit level (63 industries) is used in this study. Whilst these still may hold some internal heterogeneity, we have opted for this level of aggregation because measurement errors and misclassifications turn out to be even more problematic when applying more specific SITC categories (for the advantages of this classification and the selection of appropriate level of aggregation, see also [34]). What is more, using the two-digit over more specific categories confines the series of possible matrices from thousands to sixty-three.…”

“…The patterns for the remaining two groups of extractive products are more varied and prone to higher fluctuations over time. For example, the gas, natural and manufactured (34) has recorded a sharp reduce in the share of periphery-core trade value ranging from 41% in 2000 to 20% in 2016. There is also a gradual but continuous decline in the share of the comparable trade movements for petroleum and petroleum products (33).…”

Export competitiveness of milk and dairy products of the Republic of Srpska on the international market

“…One part of these studies refer to the period before Croatia acceded to the European Union, and for that reason, the results are no longer relevant. In North Macedonia, generally, competitiveness was calculated by Kostoska and Hristoski (2018), whereas Tuna et al (2013) examined the competitiveness of the tobacco subsector. In Bosnia and Herzegovina, the topic of competitiveness of the agricultural sector was covered by Muratović and Crnica (2010), calculating only one indicator.…”

Brazil's Comparative Advantages and Specialization Dynamics in Agri-food Trade

“…Also, following Ferto and Hubbard (2003), the correlation between the indices in time period t and the index in subsequent time periods was employed as the indicator of structural stability of Brazil's agri-food trade pattern. Another indicator of stability is the relative importance (in the export structure) of products that reveal CA in the period t, but reveal CdisA in the period t+1 or viceversa (Kostoska and Hristoski 2018). Because the year-by-year fluctuation, the comparison is made between average value of indices at the beginning (avg.1995-1999) and at the end (2013-2017) of the observed period.…”