- The Structure of the Product Space and the Evolution of Comparative Advantage
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- by Hausmann, Ricardo; Klinger, Bailey
- This paper establishes a robust stylized fact: changes in the revealed comparative advantage of nations are governed
by the pattern of relatedness of products at the global level. As countries change their export mix, there is a strong tendency to move towards related goods rather than to goods that are farther away. The pattern of relatedness of
products is only very partially explained by similarity in broad factor or technological intensities, suggesting that the relevant determinants are much more product-specific. Moreover, the pattern of relatedness of products exhibits
very strong heterogeneity: there are parts of this ‘product space’ that are dense while others are sparse. This implies
that countries that are specialized in a dense part of the product space have an easier time at changing their revealed
comparative advantage than countries that are specialized in more disconnected products.
- Publication Type: WCFIA Working Paper
- Published Date: April 2007
- Field of Interest: Comparative Politics
- Hausmann, Ricardo, and Bailey Klinger. "The Structure of the Product Space and the Evolution of Comparative Advantage." Working Paper 2008-0038, Weatherhead Center for International Affairs, Harvard University, April 2007.
- Also CID Working Paper No. 146.