The Transformation of Competitive Advantage in East Asia: An Analysis of Technological and Trade Specialization

In recent years, there has been considerable interest in the relationship between a country's export competitiveness and the role played by technology in strengthening and maintaining competitive advantage. A central feature of recent empirical work, mainly focused on the OECD countries, has rested on examining patterns of export and technological specialization between economies and sectors. This paper moves attention away from the advanced industrialized economies to examine the trends for trade and technological specialization among the East Asian developing economies. In particular, two aspects of specialization are examined: First, to what extent have patterns of competitive advantage changed over time and second, to measure the relationship between patterns of trade and technological specialization. Important differences are found in the patterns of specialization, and in the relationship between them among the advanced East Asian economies and those catching up.