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What Goods Do Countries Trade? A Quantitative Exploration of Ricardo's Ideas

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Costinot, A., Donaldson, D., Komunjer, I.·2012·The Review of Economic Studies
DOI 10.1093/restud/rdr033
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Abstract

Abstract. The Ricardian model predicts that countries should produce and export relatively more in industries in which they are relatively more productive. Though one of the most celebrated insights in the theory of international trade, this prediction has received little attention in the empirical literature since the mid-1960s. The main reason behind this lack of popularity is the absence of clear theoretical foundations to guide the empirical analysis. Building on the seminal work of Eaton and Kortum (2002), we offer such foundations and use them to quantify the importance of Ricardian comparative advantage. In the process, we also provide a theoretically-consistent alternative to Balassa’s (1965) well-known index of ‘revealed comparative advantage.’

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  • Equation (1) holds for each individual industry in the sample due to the separability property of the structural gravity model.

    “Due to the separability property of the structural gravity model, Equation (1) holds for each individual industry in our sample, compare, Anderson and van Wincoop (2004) and Costinot et al. (2012).”

    From Quantifying the partial and general equilibrium effects of sanctions on Russia (2024) · cites this paper as Costinot et al. (2012)

    Section 3.1 (p. 10) derives bilateral exports at the industry level, which supports applying a trade-flow relationship to individual industries. The cited paper does not identify the citing document’s Equation (1), and the passages do not establish that it holds for every industry specifically because of a separability property of a structural gravity model. (LLM, conf=0.78)

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Research works printed but not linked: 38

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Authors
Costinot, A., Donaldson, D., & Komunjer, I.
Affiliations
  • Massachusetts Institute of Technology (US)
  • University of California San Diego (US)
Venue
The Review of Economic Studies
Publisher
Oxford University Press (OUP)
Published
2011-09-28
Volume
79
Issue
2
Pages
581-608
ISSN
  • 0034-6527 (ISSN-L)
  • 1467-937X
DOI
10.1093/restud/rdr033
OpenAlex
W2890185250
Cited by
526
References
1
Citations by year
2026: 26 · 2025: 42 · 2024: 39 · 2023: 31 · 2022: 42 · 2021: 44 · 2020: 64 · 2019: 25 · 2018: 33 · 2017: 36 · 2016: 31 · 2015: 31 · 2014: 24 · 2013: 23 · 2012: 20
FWCI
65.70
Type
journal article
Language
en
Open access
Licence
cc-by-nc-sa
Locations
  • The Review of Economic Studies (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
  • DSpace@MIT (Massachusetts Institute of Technology) (submittedVersion, cc-by-nc-sa)
  • HighWire Press Open Archive (submittedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Global Trade and Competitiveness
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic and Technological Innovation
Keywords
Ricardian comparative advantage, international trade patterns, export specialization, revealed comparative advantage, Balassa index, factor productivity, Ricardian model, Eaton-Kortum model

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