### Teoria WYMIANY MIĘDZYNARODWEJ

```Empirical analysis of the
Leszek Wincenciak, Ph. D.
18.12.2014
Introduction
 The purpose of today’s class is to present two
things:
• Specifics of comparative advantage for given country,
 During the class we will conduct an analysis for
both aspects. As your homework you will have to
develop the analysis to include comparisons in
time or between different pairs of countries
 We will use Poland as an example. In your
homework you will have to analyse some other
country
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 Products that are important in exports
 The Balassa index (BI) for j-th product in country A
with respect to the reference group REF:
BI jA 
s Aj
s REF
j
 where sj is the share of given product in total exports
 Intuitive and simple interpretation
 What kind of data would you need to calculate it?
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Other indices: CRCA
Xi
RCAi 
Mi
 where Xi represents the exports of given product, Mi – imports of the
same product
 When RCAi is greater than 1, it means a comparative advantage for
the country for product i
 Corrected Revealed Comparative Advantage index:
Xi
Mi
CRCAi 

i X i i M i
 CRCA greater than zero indicates the products in which a given
 What kind of data would you need to calculate it?
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candies
Solaris BUS
Volvo BUS
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Measure of IIT
 Grubel-Lloyd IIT index:
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Structure of IIT: vertical vs horizontal differentiation
 Are the products really identical?
 Two types of IIT:
• Trade in horizontally differentiated goods (similar
products, similar quality and similar prices)
• Trade in vertically differentiated goods (different
quality and prices)
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How to measure these two types of
IIT?
 Most commonly adopted approach: difference in unit values (as a proxy of
prices)
 Methodology of Fontagne, Freudenberg and Gaulier (2005): for each product
(as dissaggregated as possible) classification is based on the following
scheme:
Degree of overlap in
exports and imports
Similarity of unit values of imports and exports
Is the smaller of flows at Unit value difference greater than 25%?
No data
least equal to 10% of the
on unit values
No
Yes
greater one?
Yes
No
Horizontal IIT
Vertical IIT
Unclassified IIT
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 What is the structure of comparative advantage
of Poland wrt ROW and wrt Germany – the
main trading partner? How did it look 10 years
ago?
 How can it be explained?
 What is the extent if IIT in Polish trade? Which
industries are more IIT oriented?
 What is the nature of IIT between Poland and
Germany – Horizontal vs Vertical?
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Data sources
db/dqQuickQuery.asp
x
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Parameters of selection
 Choice of classification
 To choose:
•
•
•
•
•
Product codes: AG0, AG1, … AG6
Reporters
Partners
Years
 Sumbit querry
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Product classifications
 HS and SITC – two different classifications: SITC
- more oriented for economic function of given
good on dofferent stages of production; HS –
more precise:
• HS – up to 6 (even 8 digits) – over 5000 cat.
• SITC – up to 5 digits – over 3000 cat.
 CN – classification used by EU, based on HS:
http://www.stat.gov.pl/klasyfikacje/cn/pdf/nazwy_
opisowe_CN2012.xls
 Changes in classifications, tables of concordance,
problems, problems…
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The data we will use today
 Class: SITC Rev. 3
 Parametrs chosen:
•
•
•
•
•
Products codes: AG5
Reporters: Poland (616)
Partners: World (0), Germany (276)
Years: 2000, 2010
 Class: SITC Rev. 3
 Parametrs chosen:
•
•
•
•
•
Products codes: AG5
Reporters: Germany (276)
Partners: World (0),
Years: 2000, 2010
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Supplmentary Quantity w
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Helpful operations in Excel and Stata
 Pivot table in Excel
 Merging of data files:
• Useful when you need to put together two different data
files with one common variable (identical name - id)
• merge [id variable] using some_file.dta
• New variable: _merge
 Aggregating the data
• Generate new variable: gen sitc4d = int (sitc5d/10)
• collapse (sum) exp_pol exp_ger, by (sitc4d)
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Homework
 Cooperation in groups of 2
 Submission of an Excel file with calculations
cloud disk like Google Disk, Dropbox,
OneDrive, … and just send me the link) and a
text with the report
 Choose one country for your study and its one
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Guidelines for the report
 What is the structure of comparative advantage of
a given country – wrt ROW and selected partner?
 Is this structure stable over time?
 How can you explain it?
 What is the IIT intensity of this country wtr ROW
and selected partner? Calculate GL index for three
different levels of data aggregation. Which
industries exhibit the highest GL indices?
 Does the GL index change over time?
 Horizontal and vertical differentiation of IIT.
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