Indicators and Patterns of Specialization in International Trade.
NCCR Working Paper No 2011/10 by Benno Ferrarini and Pasquale Scaramozzino
This paper extends the analysis of the product space in two dimensions. It considers net trade flowsinstead of single-trade flows as the basis for the measurement of comparative advantage, andincorporates vertical specialization into the analysis. The representation of the product spaceappears very different according to a net-trade flow indicator compared to a single-trade flowindicator, with much fewer links to connect low and medium-low productivity sectors to mediumhighand high sectors. Vertical specialization is analysed through the distribution of unit valueswithin sectors. The pattern of trade specialization is radically different for low and for high unitvalues, thus justifying a separate analysis along different segments of the unit value distribution.