Vietnam's comparative advantage in fishery products

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TOPIC 3
“How does Vietnam apply the theory of comparative advantage?”
Vietnam’s comparative advantage in fishery products
Team 6 - KT39B

Table of contents
I. Analytical framework........................................................
2
1. Revealed Comparative Advantage.............................................
2
2. Applying to Vietnam’s fishery production..................................
3
II. Empirical results...............................................................
4
1. Advantageous conditions...........................................................
4
2. Fishery production.....................................................................
5
3. Fishery achievements.................................................................
7
III. Problems and solutions.....................................................
9
1. Constraints and challenges........................................................
9
2. Recommendations.....................................................................
11
Glossary......................................................................................
13

I. Analytical framework
1 Revealed comparative advantage

Traditional trade theories such as David Ricardo’s theory of comparative advantage and Heckscher-Ohlin model of factor endowments postulate that the main basis for international trade is comparative advantage. A country’s comparative advantage is reflected by its factor endowments (labour, capital, natural resources) and technology level. Since it is hard to take account of all these factors to measure comparative advantage, Balassa (1965) offers quite a simple alternative approach. Based on the fact that exports of a country are usually dominated by its comparative advantage products, he introduces an index of revealed comparative advantage of exports RCAik of country i in good k as:

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