Impact Analysis of Normalized Revealed Comparative Advantage on ASEAN’s Non-Oil and Gas Export Pattern Using a Gravity Model Approach

Abstract

The development of global economic challenges has forced ASEAN countries to further deepen its economic integration within the ASEAN Economic Cooperation (AEC) and to incorporate several ASEAN Plus agreements into Regional Comprehensive Economic Partnership (RCEP). Under this circumstance, the ASEAN members need to distinguish how the difference in comparative advantage of each export commodity affects and influences the pattern of ASEAN's non-oil exports. This study attempts to identify the impact of comparative advantage, represented by normalized revealed comparative advantage (NRCA) index, on the non-oil export pattern of the ASEAN countries using the augmented gravity model as its research method. The results indicate that comparative advantage has a positive influence on ASEAN's non-oil exports and that the comparative advantages in agricultural commodities have the biggest influence.