Skill Distribution and Comparative Advantage: A Comparison of China and India

SummaryThis paper empirically examines the different comparative advantages of China and India, in relation to their different skill distribution patterns. By utilizing industry export data on China and India from 1983 to 2000, we find that a country with a greater dispersion of skills (i.e., India, especially in the earlier years) has higher exports in industries with shorter production chains, while a country with a more equal dispersion of skills (i.e., China, especially in the later years) has higher exports in industries with longer production chains. The causal relationship is fairly robust and skill sorting mechanism seems to work behind.