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A Comparative Analysis of Competitive Trade in a Cluster Market of the European Union: The Revealed Comparative Advantage (RCA) Index

Edward O. Adigwe

Abstract


This research is concerned with the comparative analysis of competitive
trade within the cluster market economies of the European Union. The aim
of this paper is to carry out trade analysis within the competing countries in
the European market from 2009 to 2018 which represents the period after
the global crisis of 2008 and prior to the Covid-19 pandemic of 2019 for the
purpose of determining the extent of competitive trade within the European
economies. The chosen metric is Béla Balassa’s Revealed Comparative
Advantage (RCA) index used for determining various countries’ comparative
advantage or disadvantage in trade. The findings show that the countries with
RCA > 1 thrive economically in comparison to other competing lower economies.
And the fact that the European Union economy thrives on mechanized trade
other than agricultural products irrespective of the competitive market. This
study is a significant contribution towards improving the Ricardian model
of comparative advantage on trade within a cluster market in the European
economies.

Keywords


competitiveness, revealed comparative advantage, international trade

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