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Specialization and Comparative Advantage: Evidence from Top Ten Main Actors of OIC Countries
Dyah Titis Kusuma Wardani*

Department of Development Economics, Faculty of Economics and Business, Universitas Muhammadiyah Yogyakarta, Jalan Brawijaya, Tamantirto, Kasihan, Bantul, Daerah Istimewa Yogyakarta, Indonesia 55183

*dyahtitis.wardani[at]gmail.com


Abstract

We examine specialization and comparative advantage of top ten main actors in the OIC countries, including Indonesia and Turkey. We use product definitions based on the Standard International Trade Classification (SITC), products are grouped with SITC Rev 2 with 3 digits. Data are taken from the UN-Comtrade. We are using the data of OIC top ten main actor trade in goods (export and import) to the world. To see the catch up process, among top ten main actors of OIC member countries, we employ product mapping analysis that is the combination of Revealed Symmetric Comparative Advantage (RSCA) and Trade Balance Index (TBI). This product mapping was developed to examine the competitiveness and trade specialization, where this paradigm tries to explain the phenomenon of industrial development in catching up with the economy. RSCA as an indicator of comparative advantage and the TBI as an indicator of export and import activities. In addition, TBI is used to analyze whether a country specializes in exports (as a net exporter) or in imports (as a net importer) for a certain group of products (SITC). Based on product mapping analysis, results shows that there has been a changing pattern of Empirical Trade statistics Analysis (ETA) Code of product group A to group E including 3 digits unclassified product group related to top twenty product in their competitiveness and specialization (commodity and country based) in 1996, 2006 and 2016 of ten main actors of OIC countries including Indonesia and Turkey.

Keywords: Specialization; Comparative advantage; RSCA index; OIC countries

Topic: International Conference of Islamic Economic and Financial Inclusion

Link: https://ifory.id/abstract/XAtDguRjvYGL

Conference: The 3rd International Conference on Sustainability and Innovation (ICoSI 2019)

Plain Format | Corresponding Author (Dyah Titis Kusuma Wardani)

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