Determinants of the revealed comparative advantages: The case of the European ham trade

Abstract

Revealed comparative advantages are widely used by the global literature to analyse the international trade flows, though agricultural trade is usually neglected in the empirical works. Moreover, the determinants of revealed comparative advantages are scarcely investigated. This article analyses revealed comparative advantages in European ham trade from 1999 to 2013 and identifies its determinants by using the panel data econometrics. The results suggest that quality linked to the production area highly affects the competitiveness of the European ham trade. Also, the EU accession is positively correlated with the competitiveness, meaning that the economic integration fosters competitiveness. However, in spite of the initial expectations, the FDI is negatively related to the competitiveness of the European ham trade, underlining the importance of the national ham processing companies.