Comparative Advantage in Manufactured Goods: A Reappraisal

Japanese input coefficients are used to investigate the pattern of comparative advantage in the exportation of manufactured products in a cross-country framework. Estimates are made for the imports of manufactured products as well as for net exports. Also, alternative techniques of estimation are utilized and an attempt to explain the residuals in the regression equations and to indicate the predictive power of these equations is made. The paper shows that patterns of comparative advantage in manufactured goods can be explained by reference to commodity characteristics and country characteristics. In turn, intercountry differences in the extent of trade orientation, the concentration of exports, and foreign direct investment explain part of the residuals of the cross-country regression equations. Finally, it has been found that the method applied permits projecting the factor intensity of trade for individual countries.