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The contribution of granular and fundamental comparative advantage to European Union countries' export specialisation
Author(s) -
Lucio Juan,
Mínguez Raúl,
Mido Asier,
Requena Francisco
Publication year - 2020
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.12989
Subject(s) - comparative advantage , european union , international trade , economics , international economics , revealed comparative advantage , economic geography
This paper analyses the contribution of fundamental comparative advantage (a country‐specific component) and granular comparative advantage (a firm‐specific component) to European Union countries' export specialisation. We find that, on average, granular comparative advantage may explain export specialisation in 29% of industries, which account for 47% of total exports. We also show that 60% of the variation in export specialisation across countries and industries may be explained by granular comparative advantage. These results highlight that some outstanding firms may play a very important role in explaining European Union countries' export specialisation.