Recently I've made a presentation of my master's dissertation, entitled "The Comparative Advantages in the Services Sector of the BRIC". Here I leave the slides made for this presentation. Please feel free to give me constructive feedback, and I'll be happy to answer all your questions.
2. The Comparative Advantages in the
Services Sector of the BRIC
2
Investigação Jovem da Universidade do Porto | Nuno Montenegro | Feb 2016
3. The Comparative Advantages in the
Services Sector of the BRIC
3
Investigação Jovem da Universidade do Porto | Nuno Montenegro | Feb 2016
4. 41%
Developing Countries were
responsible for 41% of the
world’s merchandise trade
34%
Developing Countries were
responsible for 34% of the
world’s services trade
4
According to the latest WTO report:
5. 5
Motivation for this study
- Past growing trend of the Developing
Economies;
- Expected evolution of this economies;
- Major Driver of Growth in recent years;
- Spillovers to merchandise exports
7. 7
1. Research Question and Goals
Investigate
the proper
indicator
Identify the
biggest
developing
“Players”
Explore the
services export
structure
Formulate policy
recommendations
“How have the comparative advantages in
services evolved in the Developing
Economies?”
8. 8
2. Literature Review:
How do we define services?
two essential characteristics may be noted. The
first is that services cannot be produced
without the agreement, co-operation and
possibly active participation of the consuming
unit(s). The second is that the outputs
produced are not separated entities that exist
independently of the producers or consumers.
(Hill, 1999, p. 428)
9. 9
2. Literature Review:
Theories of Comparative Advantage
Theory of
Comparative
Advantage
Origins
Source of
Comparative
advantage
Main Authors Further Contributions
Concept
Embodied
Classical XIX century
Technological
Differences
David Ricardo
Eaton and Kortum (2002)
Included Gravitational
Models
Deardorff (2014)
Incorporated
Transportation Costs
Neoclassical XX century
Relative Factor
Endowments
Heckscher-Olhin
Morrow (2010) Both Included
Technological
differences in the HO
Model
Fisher (2011)
Institutional XXI century
Institutional
Environment
Nathan Nunn;
Anderson and
Marcouiller
Chor (2010)
Incorporated the 3
different views in one
model
Ju and Shang-Jai (2011)
Included a Financial
Framework in the
Neoclassical
Approach
10. 10
2. Literature Review:
Measuring Comparative Advantages
Balassa Index Normalized RCA
Requires several corrective
measures, such as the SRCA
and the ARCA
A new measure that corrects
several problems of the BI;
does not require corrective
measures
11. 11
2. Literature Review:
From BRIC to Developing Countries
- Several International Problems affect the
group stability;
- Lack of growth of Russia and Brazil;
- The Goldman Sachs BRIC fund has closed;
“The BRICs are dead. Long live the TICKs.”
(Financial Times, 2016)
12. 12
3. Methodology
Quantitative analysis:
- Secondary data retrieved from the UNCTAD
statistics Database
- 10 countries (biggest services traders)
- 1994 to 2014 (or 2013, due to methodology
changes)
- 10 categories of services