Revealed Comparative Advantage

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The Revealed Comparative Advantage (RCA, dt of revealed comparative advantage ) is an index which indicates the relative advantages and disadvantages of a particular country in relation to the local production of certain goods and services. He is a derived form of comparative advantage. The index goes back to Béla Balassa (1965 ):

RCA = ( Eij / Eit ) / ( Enj / Ent)

It is ( i) the national sector (eg machinery exports ) and ( t) are all sectors ( j) are the total national exports and (n ) the total international exports. The national sector so it is shared by all national exports BY the global sector through the world exports.

The result is a ratio of the national sector share to the international sector share. If the index is greater than 1, this is an indication of a specialization of a regional or national economy, because of the regional sector share is relatively higher than the international sector share. An index below 1 indicates the opposite.