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Revealed Comparative Advantage (RCA)

Revealed Comparative Advantage (RCA). RCA cg = ( X cg / X ca )/( X wg / X wa ) = ( X cg / X wg )/( X ca / X wa ) c: country g: product classification a: all goods w: world. X cg /X ca : good g export share for country c .

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Revealed Comparative Advantage (RCA)

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  1. Revealed Comparative Advantage (RCA) RCAcg= (Xcg/Xca)/(Xwg/Xwa) = (Xcg/Xwg)/(Xca/Xwa) c: country g: product classification a: all goods w: world. Xcg/Xca: good g export share for country c . Xwg/Xwa: good g export share of the world. Xcg/Xwg: country c share or good g world market . Xca/Xwa: country c share world market for all goods. RCAcg>1 Country c has a revealed advantage in good g. RCAcg<1 Country c has a revealed disadvantage in good g.

  2. RCA: an example Source: UN COMTRADE accessed in Jan., 2008

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