Revealed Comparative Advantage, Export Specialization Index and Product Concentration of Climate Smart Goods in Ecuadorian Exports: A Comparative Analysis with India

The Table II reveals that there are two products in which Ecuador has a comparative advantage in production in 2010. These two industrial codes have RCA>1 in 2010 and hence Ecuador has a comparative advantage in the production of such products. These products are

732111

Solar driven stoves, ranges, grates, cookers (including those with subsidiary boilers for central heating), barbecues, braziers, gas-rings, plate warmers and similar non-electric Domestic appliances, and parts thereof, of iron or steel.

732190

Stoves, ranges, grates, cookers (including those with subsidiary boilers for central heating), barbecues, braziers, gas-rings, plate warmers and similar non-electric Domestic appliances, and parts thereof, of iron or steel.

Table II: Revealed Comparative Analysis for CSG Products for Ecuador in 2009 and 2010.

Source: Author's calculations from WITS data base. Please note that Ecuador has advantage in the production of CSG Products 732111 and 732190 in 2010.

The Export Specialization index helps us to identify markets for the CSG products in which Ecuador has a comparative advantage. Table III identifies the markets for two of the CSG products in which Ecuador has an advantage in production. They are Chile, Columbia and Peru in 2010.The export specialization (ES) index is a slightly modified RCA index, in which the denominator is usually measured by specific markets or partners. It provides product information on revealed specialization in the export sector of a country and is calculated as the ratio of the share of a product in a country's total exports to the share of this product in imports to specific markets or partners. A Value greater than one indicates advantage of producing and exporting into the identified markets.

Table III: Export Specialization Index for Specialized CSG Products for Ecuador in 2010

Source: Author's work in WITS

One can also see the greatest product concentration in Ecuador's total exports of CSG products lies in product 732111(0.42). See Table IV below

Table IV: Product Concentration(PC) of CSG Products in Ecuador's Exports

Source: Author's work in WITS

A comparative analysis is done with India. India has comparative advantage in eighteen out of the 64 goods list of the Climate Smart Goods in 2010. These range from disaggregated articles of iron and steel, machine and mechanical appliances, chemical products and electric meters. (See the Table V below and appendix list I for details of the 64 products CSG list)

Table V: RCA for CSG Products in India in 2010

Source: Author's work Using WITS

Table VI is on Export Specialization Index(>1) helps us to identify markets for the Climate Smart Goods from India. It seems that industrial products-Fuel cells use hydrogen or hydrogen-containing fuels such as methane to produce an electric current, through an electrochemical process rather than combustion is identified for Hong Kong, China. Hydraulic turbines and water wheels of a power not exceeding 1,000 kW for Belgium. Electric generating sets and rotary converters; wind-powered for the United States. Gas turbines of a power not exceeding 5,000 kW for Netherlands. Containers of any material, of any form, for liquid or solid waste, including for municipal or dangerous waste for the United Kingdom and Hydraulic turbines & water wheels, of a power >10000kW for France in 2010.

Table VI: Export Specialization Index for CSG Products for India in 2010 and Identification of Markets for CSG Products of India

Source: Author's work using WITS data base

The study works out the product concentration of CSG products in India's Total Exports (Table not shown): Industrial codes PVC or polyethylene plastic membrane systems to provide an impermeable base for landfill sites and protect soil under gas stations, oil refineries, etc. from infiltration by pollutants and for reinforcement of soil (392690) has O.13 % share in India's total exports. Machinery, plant or laboratory equipment whether or not electrically heated (excluding furnaces, ovens etc.) for treatment of materials by a process involving a change of temperature (841989) has 0.21% share. Photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light-emitting diodes (854140) has 0.27% share. Parts suit.for use solely/princ. With the machines of 85.01/85.02 (850300) has 0.13% share in total exports of India and 850440(Static Converters) has .16% share.