Static and dynamic revealed comparative advantage: A comparative analysis of Turkey and Russia

Abstract

With respect to bilateral trade between Turkey and Russia, static and dynamic RCA was calculated for 14 ‘common sectors’, in which Russia and Turkey exported similar quantities of goods to the rest of the world. The static RCA is indicative of the fact that Turkey is more advantageous than Russia at both bilateral and global levels. However; an analysis of dynamic RCA for the 14 common sectors revealed that while Turkey has dynamic comparative advantage for six sectors, Russia has dynamic comparative advantage for 11 sectors. Despite the fact that Russia is more disadvantageous than Turkey in static terms, it has more sectors falling under the rising star category in dynamic terms. In this context the results of this study could be used to develop new fiscal policies to improve both static and dynamic sectorial comparative advantage.