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The calculations of vertical specialisation assume that all
imports originate in other countries and do not take into
account that parts of imports may consist of products that
originally are domestic. If, for example, Spain imports an
electronic good and a component in that good previously
was produced and exported from Spain, Spanish imports of
TAbLE IV.14: Indicators of RCA for manufactured goods in 2000 and 2009
that good appear as larger than they actually are. This then
overestimates the vertical specialisation for Spain. 82
Considering that an industry’s exports may include a large
proportion of imports, the validity of the traditional way to
measure the external competitiveness of industries must be
in doubt. The RCA‑indices presented above do not take into
account that a large part of the exports can be produced in
another location.
Competitiveness is assessed below using an adjusted
measure of revealed comparative advantages (RCA). The
adjusted RCA measures are calculated for different types
of goods defined according to the basic classes of goods
in the system of national accounts (SNA): intermediate
goods, capital goods, consumer goods and goods not
else classified (goods n.e.c.). 83 The adjusted RCA measures
are calculated for both exports and imports. Especially
interesting is the measure for imports of intermediates
which shows whether a country has comparative advantage
of assembly. 84
82 Kommerskollegium (2010). See also Hummels et. al. (2001) for
a more detailed discussion.
83 The categories of goods in SNA consist of aggregation of the
goods classified according to the Broad Economic Category (BEC)
classification. BEC consists of seven types of goods: consumer
goods, capital goods, industrial supplies, fuels, transport
equipment, food and beverages and goods not elsewhere
specified.
84 See OECD (2010) and Ng and Yeats (1999) for discussions of these
RCA measures.
Chapter IV — International competitiveness of EU industry
Beginning with the very broad categories of manufactured
goods, China is the only country without comparative
advantage in intermediate exports. Chinese and
Indian industries seem to be dependent on imports of
intermediate goods which are indicated by the high RCA
indicator for intermediate imports, cf. Table IV.14.
intermediate goods consumption goods capital goods goods nec
Exports imports Exports imports Exports imports Exports imports
2000 2009 2000 2009 2000 2009 2000 2009 2000 2009 2000 2009 2000 2009 2000 2009
Eu‑27 1.2 1.1 1.0 0.9 0.5 0.5 0.9 1.1 1.7 1.7 1.0 0.9 1.8 1.6 1.1 1.2
Brazil 1.5 1.7 1.2 1.1 0.5 0.4 0.5 0.6 1.2 0.7 1.1 1.2 0.5 0.6 0.4 0.6
china 0.9 0.9 1.4 1.4 1.1 0.8 0.1 0.1 1.2 2.3 1.0 1.1 0.2 0.2 0.2 0.3
india 1.4 1.3 1.6 1.5 1.0 0.9 0.2 0.2 0.2 0.7 0. 5 0.8 0.4 0.6 0.2 0.3
Japan 1.4 1.5 1.1 1.1 0.2 0.2 1.3 1.2 2.3 2.0 0.7 0.7 0.6 0.5 0.5 0.4
russia 2.3 2.2 0.9 0.6 0.1 0.1 1.3 1.6 0.3 0.2 1.2 1.5 0.1 0.8 0.2 1.0
usa 1.4 1.3 0.8 0.8 0.4 0.4 1.2 1.3 1.8 1.2 1.1 1.2 1.2 2.4 1.8 1.3
Source: own calculations using COMTRADE data.
In the table above, very broad categories of manufactured
goods were analysed. While these aggregates provide
some useful information regarding specialisation patterns
across countries, the aggregates necessarily mean that
industry differences are hidden. Looking more closely
at a disaggregation of intermediate goods allows for
separation of manufactured goods into a classification
according to technological intensity. Of the BRIC countries,
only China seems to have comparative advantages in
exports of high‑tech intermediate exports. The high RCAs
for imports indicate that China also has comparative
advantages in the assembly of intermediate goods in
medium high‑tech and high‑tech industries. 85 However,
the EU, Japan and the US also have comparative advantages
in assembling high‑tech goods, although not to the same
extent. The results in the table below are therefore not
conclusive on this point, cf. Table IV.15.
85
where int denotes intermediate goods, i industry and c country.
See Ng and Yeats (1999) and OECD (2010) for a discussion of this
indicator.
127