Globalisation, Comparative Advantage and the Changing Dynamics of Trade

image of Globalisation, Comparative Advantage and the Changing Dynamics of Trade

The effects of globalisation have been at the forefront of public debate in recent years, fuelled on the one hand by the large benefits of integrated markets, and on the other hand, by the detrimental adjustment effects often experienced by many economies as a result.  Knowing how trade has been evolving over time and the role policy has played in this evolution are critical to understanding the globalisation debate and grasping the lessons for future policy development. The comparative advantage hypothesis has been suggested as one of the principal explanations of international trade and of the benefits associated with openness. It has also provided the intellectual underpinnings for most trade policy in the past 50 years. This book collects OECD work that builds on recent contributions to the theory and empirics of comparative advantage, putting particular emphasis on the role policy can play in shaping trade.


Determinants of diffusion and downstreaming of technology-intensive products in international trade

The patterns of trade for a broad category of technology-intensive products, including advanced technology products (ATP), are analysed for a group of 15 economies in Asia, Europe, and the United States. This chapter finds that the degree of downstreaming is highly sector- and product-specific. For example, there has been more downstreaming of electronics than chemicals, of consumer electronics than electronic components, and of certain basic chemicals than specialized products, such as photographic film and cosmetics. The chapter also discusses the roles of technology, national and sectoral innovation systems, government policies, and other factors in shaping the degree of diffusion and downstreaming.


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