The main feature of the italian trade pattern is the polarization of revealed comparative advantage in the traditional labor intensive sectors. This seems at odds with the fact that Italy is a high-income industrial country. In this paper, we argue that this peculiar trade structure can be explained by the joint interaction of increasing returns to scale and factor proportions. In other words, the two main theories of international trade turn out to be useful in order to account for the current structure of italian revealed comparative advantage and its evolution in the last decades.
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