A Note on the Balassa Index of Revealed Comparative Advantage

37 Pages Posted: 8 Nov 2001

See all articles by Luca De Benedictis

Luca De Benedictis

University of Macerata; Luiss University

Massimo Tamberi

Polytechnic University of Marche - Faculty of Economics

Date Written: October 15, 2001

Abstract

It is customary in the empirical trade literature to analyze specialization patterns of countries using Revealed Comparative Advantage (RCA) measures. This paper explores the pros and cons of the most commonly used RCA index: the Balassa (1965) Index of RCA.

After describing the properties of the Balassa Index, we analyze two different normalizations of the original Index recently proposed by Laursen (2000) and Proudman and Redding (1998) to remedy some of the shortcomings of the original index, and we propose an alternative and more traditional strategy in order to analyze the dynamics of specialization.

Keywords: International Trade, Specialization, Revealed Comparative Advantage

JEL Classification: C10, F14

Suggested Citation

De Benedictis, Luca and Tamberi, Massimo, A Note on the Balassa Index of Revealed Comparative Advantage (October 15, 2001). Available at SSRN: https://ssrn.com/abstract=289602 or http://dx.doi.org/10.2139/ssrn.289602

Luca De Benedictis (Contact Author)

University of Macerata ( email )

Via Crescimbeni 14
Macerata, MC 62100
Italy

HOME PAGE: http://docenti.unimc.it/luca.debenedictis

Luiss University ( email )

Viale Pola 12
Rome, 00198
Italy

Massimo Tamberi

Polytechnic University of Marche - Faculty of Economics ( email )

Piazzale Martelli, 8
60121 Ancona
Italy
+390712207087 (Phone)
+390712207102 (Fax)

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