Does Comparative Advantage Explain Export Patterns in China?
Revealed comparative advantage indices are calculated for China (1980-2000 period) and the Chinese provinces (1990-1998 period) and then incorporated into a reduced form export equation. The results of China’s export patterns show that China has moved from a heavy industry-oriented development strategy to a comparative advantage one, with, however, marked differences among provinces. The econometric results show that this shift had a significant impact on the exports, besides the effects of real effective exchange rate, world demand, and domestic supply.
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