Good morning.Yes, there are many (more) ways of estimating revealed comparative advantages. Just to increase the confusion, I made a comparative review of different approaches in:

Article Contrasting Revealed Comparative Advantages when Trade is (a...

As for your specific question, in the case of bilateral comparison, I would go for the simple ratios you mention, comparing the results of standard formula (multilateral RCA computed on total World trade) and RCA computed only on bilateral trade.

If there is a large difference, then something different than standard comparative advantages is at work.

By the way, when looking at bilateral trade, it seems natural (but I did not look in details) to compute i to j exports and j to i exports to take into consideration two-ways trade. Some formulas include also two-ways trade when calculating standard (multilateral) RCAs.

Hope it helps.

Good afternoon Sir,

Thank you very much for your kind response. I thought that in BRCA, world trade should not be mentioned. It should be

[ Numerator- i country export k product to j country divided by total export of i county to j country]

[Denominator- j country export k product to i country divided by total export of j county to i country]

BRCA= Numerator/Denominator

This is a new formula and I did not find this formula in any literature before.

Sir, it is true. Hubert Escaith

Happy to have been of some help

Good afternoon!

Perhaps you are interested in reading a different take on comparative advantage:

Article OVERCOMING ABSOLUTE AND COMPARATIVE ADVANTAGE: A REAPPRAISAL...

Good morning Sir,

Thank you very much for sharing your paper's information. I shall be happy if I shall get full paper. My email is [email protected]

thank you again for your comment. Jorge Morales Meoqui

Hubert Escaith Jorge Morales Meoqui

Changing the formula will change the result. It means, formula will decide which product will be good for export.

Is it possible that formula will decide which product will be good for export?

I think export should decide that which formula is appropriate?

It is a urgent need of investigation of BRCA's formula.

#BRCA

Bilateral Revealed Comparative Advantage.

Raghavendra Yadav Not sure RCAs indicate products that are  »good » to export. They are just indicators of some specialisation occurring for reasons of natural resources, history or the competitive advantages of some firms.

Is more specialisation along those existing lines good or bad?

You have to consider the externalities (positive if the exporting industries have strong domestic linkages, negative if they are damaging the environment) and the dynamics (are they specialised in a growing segment of the world market, are they including increased technological progress and skills, etc..).Then, you must also consider the risks, especially increased competition on a given segment.

This said, BRCA can be important indicator of strength and weakness. No more, but no less.

Thank you very much Sir for your valuable inputs. Hubert Escaith

Good afternoon Mr. Raghavendra Yadav. Two comments about your questions. 1) I recommend the paper “Revealed comparative advantage and the alternatives as measures of international specialization” by Dr. Keld Laursen. He explains why there are some different ways to calculate the index, and he also recommends one of them: revealed symmetric comparative advantage. 2) Following the theory of comparative advantage, RCA indexes are indicators of specialization. The index by itself does not say anything about “which product will be good to export”. The results of the index are already telling you.

Good evening Sir José Tomás Peláez Soto

Thank you very much for your reply/comment.

I'll go thru the recommended paper.

I want to work on the diverse formula of BRCA.

May you suggest me any funding agency for this research?