Agric. Econ. - Czech, 2018, 64(2):51-60 | DOI: 10.17221/173/2016-AGRICECON

Drivers of the duration of comparative advantage in the European Union's agri-food exportsOriginal Paper

Stefan Bojnec¹, Imre Ferto^*,2

¹ Faculty of Management, University of Primorska, Koper, Slovenia

² Institute of Economics, Hungarian Academy of Sciences, Budapest, Hungary

The article investigates the duration of comparative advantage indices in the European Union (EU-27) agri-food exports using the normalised revealed comparative advantage index on the global market. There is employed both a descriptive analysis of the duration of comparative advantage, and examined the major drivers using discrete-time duration models with proper controls for unobserved heterogeneity. The robustness of the models is tested with alternative estimation procedures and sub-samples. Estimations show that the comparative advantages for most agri-food products survived for a certain number of years, but a high percentage of them have a shorter duration. Larger trade costs decrease the probability of survival in comparative advantages, while the level of economic development, the size of the country, the agri-food export diversification, and being a new EU member state increases it. Implications for the EU-27 member states and agri-food policies are suggested in the conclusion.

Keywords: normalised revealed comparative advantage, duration analysis, discrete time models, agri-food exports, European Union

Published: February 28, 2018  Show citation