International Specialization

Patterns of international speciality One interesting aspect of piece lot concerns the nature of international specialty. To what extent do countries specialize in particular industries? To the extent that they so, can any(prenominal) pattern of specialization be detected? The concept most widely utilize by economists for measuring a countrys specialization in a particular product group is that of revealed comparative advantage (RCA). This can be measured in unity of two ways. Firstly, the share of the country in total world exports of a particular product group may be compared with its share of world exports of all commodities. Alternatively, it is possible to estimate a countrys export-import ratio for all products. In both cases, a number greater than one would indicate a degree of specialization. If the number is increasing over time as trade barriers are lowered, this would indicate increasing specialization in that product group. Countries specialize to quite a low degree. Although in that location are some industries in which one or more countries have a strong specialization (Japan in automotive products for instance), for many of the countries shown in the table there were few if any industries in which this was the case.

The growth of world trade, especially in manufactures, would call down an increase in the degree of specialization, however. The solution is to be free-base in the type of specialization that has been taking place as world trade has expanded. Rather than countries specializing in whole industries (so called inter-industry specialization), specialization has taken place at the product level (intra-industry specialization). In other words, specialization has taken a narrower form than in the past. Intra-industry specialization can take one of two forms: crosswise and vertical. Horizontal intra-industry specialization occurs when each country specializes in a particular group or range of products belonging to the kindred industry. For example, in the... If you want to get a full essay, order it on our website: Ordercustompaper.com

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