RCA vs. RTA and Sectoral Import vs. RTA

Abstract

In mainstream literature, it is argued that technological specialization patterns of countries should be in accordance with their trade specialization pattern. In empirical applications, a Revealed Technological Advantage (RTA) index is used to measure technological specialization while a Revealed Comparative Advantage (RCA) index is used to measure trade specialization patterns. This chapter provides an extensive analysis of the relation between RTA and RCA of seven developed countries (Germany, France, Italy, Japan, The Netherlands, the UK, and the USA) for twenty-one manufacturing sectors. RCA indexes are calculated by using worldwide export data whereas RTA indexes are measured by patents granted in Turkey over the period 1990-2006. Although a bird’s eye view supports a relation, there has not been a strong statistical validation of the relationship between these two variables; in addition, this chapter investigates whether RTA is related to the sectoral import ratio of Turkey for each country. Empirical findings indicate that the direction of the relationship between the sectoral import ratio and RTA varies according to the technological composition of sectors for each country.