Low carbon technology exports: the race is still open
A country’s relative strength in exporting a certain product is likely to persist. But it is easier to gain a comparative advantage in exporting low carbon products. When it comes to R+D, strength in a certain technological field is much less linked to past specialisation. This also holds for low carbon technologies. Finally, our preliminary findings are consistent with the view that R+D can help a country specialise in clean technology exports. However, we are not yet able to show that policy action supporting R+D in clean technologies is a sensible way to develop a comparative export advantage in these sectors.
BY: GEORG ZACHMANN AND ENRICO NANO D
It is self-evident that countries tend to be better at producing and exporting some goods than others. The factors that drive a country’s competitive advantages have been a subject of discussion for decades. The idea of “comparative advantage” as originally developed by Ricardo was considered static and dependent only on resource endowments. However, in the wake of globalisation and the liberalisation of international markets, new trade theories incorporated dynamic and endogenousproperties. In these models, countries could alter their trade specialisation through technological change and knowledge accumulation. Trade policy in most western countries consequently adapted to this new globalised world by encouraging R&D investment, with the assumption that a technological advantage promotes a trade advantage.
If policymakers want to “engineer” comparative advantages, they need to understand how volatile or path-dependent a country’s specialisation actually is. How easy is it to shift a country’s export behaviour, and are low-carbon sectors more or less flexible? It is especially interesting to ask how easy it will be for countries to develop a comparative advantage in exports that are relevant to the transition to a low-carbon economy, since these are likely to be high-growth sectors.
In this piece, we focus on comparative advantage in four emerging sectors that are strategic for the low-carbon transition: solar panels (photovoltaics – PV), wind turbines, batteries and electric vehicles. First we examine trade specialisation, based on export data. Then we analyse the path-dependency in technological specialisation, based on patent data. Finally, we explore the correlation between the trade and technological domains.
We use a relative measure of trade specialisation – the Revealed Comparative Advantage (RCA) – and a relative measure of technological specialisation – the Revealed Technological Advantage (RTA). This is important in order to take account of size differences at the sector and country level (see the methodological annex below). All years and countries for which sufficient data is available were considered.
How persistent is a country’s export specialisation?
Figure 1 – Correlation of the 2015 RCA with the same sector’s past RCA
Source: UN COMTRADE database, own calculations.
Notes: The chart shows the correlation of each sector’s RCA in 2015 with the same sector’s RCA in each previous year, across countries. All countries for which data are available were considered and the exact number of countries for each correlation depends on each year-sector export data availability. The dotted line is the median correlation, across all 5482 export products, of the RCA in 2015 with the corresponding RCA in each previous year. The shaded area comprises the RCA correlations of all sectors between the 5th and the 95th percentiles of the distribution.
We also observe some differences across technologies:
Wind turbines’ current revealed comparative advantage is most correlated to past comparative advantage in the short and medium term – above 0.8 for the first 5 years and at least 0.6 after 2005 – and the lowest in the long term, dropping below 0.4 before 2000. This implies that the market, after a very dynamic phase in the late 1990s, seem to have matured around 2005.
www.fotavgeia.blogspot.com
A country’s relative strength in exporting a certain product is likely to persist. But it is easier to gain a comparative advantage in exporting low carbon products. When it comes to R+D, strength in a certain technological field is much less linked to past specialisation. This also holds for low carbon technologies. Finally, our preliminary findings are consistent with the view that R+D can help a country specialise in clean technology exports. However, we are not yet able to show that policy action supporting R+D in clean technologies is a sensible way to develop a comparative export advantage in these sectors.
BY: GEORG ZACHMANN AND ENRICO NANO D
It is self-evident that countries tend to be better at producing and exporting some goods than others. The factors that drive a country’s competitive advantages have been a subject of discussion for decades. The idea of “comparative advantage” as originally developed by Ricardo was considered static and dependent only on resource endowments. However, in the wake of globalisation and the liberalisation of international markets, new trade theories incorporated dynamic and endogenousproperties. In these models, countries could alter their trade specialisation through technological change and knowledge accumulation. Trade policy in most western countries consequently adapted to this new globalised world by encouraging R&D investment, with the assumption that a technological advantage promotes a trade advantage.
If policymakers want to “engineer” comparative advantages, they need to understand how volatile or path-dependent a country’s specialisation actually is. How easy is it to shift a country’s export behaviour, and are low-carbon sectors more or less flexible? It is especially interesting to ask how easy it will be for countries to develop a comparative advantage in exports that are relevant to the transition to a low-carbon economy, since these are likely to be high-growth sectors.
In this piece, we focus on comparative advantage in four emerging sectors that are strategic for the low-carbon transition: solar panels (photovoltaics – PV), wind turbines, batteries and electric vehicles. First we examine trade specialisation, based on export data. Then we analyse the path-dependency in technological specialisation, based on patent data. Finally, we explore the correlation between the trade and technological domains.
We use a relative measure of trade specialisation – the Revealed Comparative Advantage (RCA) – and a relative measure of technological specialisation – the Revealed Technological Advantage (RTA). This is important in order to take account of size differences at the sector and country level (see the methodological annex below). All years and countries for which sufficient data is available were considered.
How persistent is a country’s export specialisation?
Figure 1 – Correlation of the 2015 RCA with the same sector’s past RCA
Source: UN COMTRADE database, own calculations.
Notes: The chart shows the correlation of each sector’s RCA in 2015 with the same sector’s RCA in each previous year, across countries. All countries for which data are available were considered and the exact number of countries for each correlation depends on each year-sector export data availability. The dotted line is the median correlation, across all 5482 export products, of the RCA in 2015 with the corresponding RCA in each previous year. The shaded area comprises the RCA correlations of all sectors between the 5th and the 95th percentiles of the distribution.
We also observe some differences across technologies:
Wind turbines’ current revealed comparative advantage is most correlated to past comparative advantage in the short and medium term – above 0.8 for the first 5 years and at least 0.6 after 2005 – and the lowest in the long term, dropping below 0.4 before 2000. This implies that the market, after a very dynamic phase in the late 1990s, seem to have matured around 2005.
www.fotavgeia.blogspot.com
Δεν υπάρχουν σχόλια:
Δημοσίευση σχολίου