In view of testing the hypothesis whether the structure of external trade and the
revealed comparative advantages of Laos have changed over the last two decades as a result of trade liberalization, this paper examined the patterns of international trade for the period
1985-2005. In order to infer the country‟s comparative advantages, the empirical analysis
applied the export performance index and the net export index to measure the revealed
comparative advantage. Using trade data reported by 38 trade partners, the two indices of
RCA were calculated for all available commodities in Comtrade at the three-digit level of the
SITC. The use of partners‟ trade data from international sources has some merits that the data
have been streamlined to international recording system (SITC of the United Nations). Hence,
this analysis captures only formal trade between Laos and her partners. However, the import
and export values applied in this study would differ somewhat from the actual values
(particularly for the early stage of the reforms), had domestic trade data been available or
informal/border trade been captured. Yet, the analysis in this paper mainly focuses on trends
of RCA and hence would not be affected much by the use of partner countries‟ data in
Comtrade. Especially, the discrepancy would be much smaller for recent years, as the number
of reporting countries has been increased and the quality of data improved.
In view of testing the hypothesis whether the structure of external trade and therevealed comparative advantages of Laos have changed over the last two decades as a result of trade liberalization, this paper examined the patterns of international trade for the period1985-2005. In order to infer the country‟s comparative advantages, the empirical analysisapplied the export performance index and the net export index to measure the revealedcomparative advantage. Using trade data reported by 38 trade partners, the two indices ofRCA were calculated for all available commodities in Comtrade at the three-digit level of theSITC. The use of partners‟ trade data from international sources has some merits that the datahave been streamlined to international recording system (SITC of the United Nations). Hence,this analysis captures only formal trade between Laos and her partners. However, the importand export values applied in this study would differ somewhat from the actual values(particularly for the early stage of the reforms), had domestic trade data been available orinformal/border trade been captured. Yet, the analysis in this paper mainly focuses on trendsof RCA and hence would not be affected much by the use of partner countries‟ data inComtrade. Especially, the discrepancy would be much smaller for recent years, as the numberof reporting countries has been increased and the quality of data improved.
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