The dynamics of changing comparative advantage in the Asia‐Pacific region

As a response to the changing economic environment and domestic comparative advantage, Asian countries have undergone significant structural change and readjustment. The manufacturing sector of the ASEAN economies is of interest not only because of the pace of industrialization that has occurred in the region, but also because in each country manufacturing has undergone a major transformation. One element of this process is the increase in manufactured exports. Another is the profound change in the structure of manufacturing, involving the transition from simple consumer goods and resource‐based processing activities towards more sophisticated industrial structures. To determine whether or not the case of ASEAN accords well with the predictions of trade theory, changes in a measure of revealed comparative advantage (RCA) ‐ the export specialization ratio (Balassa 1965) ‐ are identified. An attempt is then made to see how closely the dynamic changes in industrial structure have followed the flying‐geese pattern of development (Akamatsu 1961, 1962).