CEPII, Recherche et Expertise sur l'economie mondiale
RCA



The new RCA database contains revealed comparative advantage measures (RCA) obtained by using the methodology suggested by Costinot et al. (2012) - adjusted to some extend for a proper worldwide comparison of indexes.

Several indexes have been proposed as proxies for country-sector specific comparative advantage; among them Balassa index (Balassa 1965) has been widely used in the literature. However Balassa Index has not a proper theoretical micro foundation and some problems related with its empirical distribution.

The new index proposed by Costinot et el (2012) – and here systematically computed for several countries and products – solves both theoretical and empirical distribution problems with former measures of comparative advantages.   

The index is then provided for 20 countries over the period 1995-2010 at two different product disaggregation levels (HS-2 and HS-4). Each database contains 5 variables:
  • country is the country of interest (i.e. the exporter country);
  • isocode is the ISO 3166-1 numeric code of the country;
  • year is the year dimension;
  • hs2 or hs4 indicates the sector of interest (respectively HS-2 and HS-4);
  • RCA is the index of revealed comparative advantage.

 Download RCA index for several industries and countries


 Methodology: a Short Description
The RCA index is based on econometric technique (detailed description on the related CEPII working paper). All in all, it is a three steps procedure:
  1. First, we estimate country pair-product specific export flows using exporter-product and importer-product fixed effects.
  2. Second, we use the coefficients associated with the exporter-product fixed effects to recover a productivity parameter (which is then country-product specific)
  3. Third, we normalize the previous productivity parameter to the sake of easy interpretation.    

Presentation

Reference document to mention
Leromain, E. and Orefice.G (2013), "New Revealed Comparative Advantage Index: dataset and empirical distribution", CEPII Working Paper 2013-20

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 Responsable
Gianluca Orefice

 Contact
gianluca.oreficecepii.fr