Italy is a high-income industrial country. Yet, it is largely specialized in the traditional labor intensive sectors. Why? In this paper, we argue on empirical and theoretical ground that this peculiar trade structure can be explained by the joint interaction of increasing returns to scale and factor proportions. In other words, the two main theories of international trade turn out to be useful in order to account for the current structure of Italian revealed comparative advantage and its evolution in the last decades.
ASJC Scopus subject areas
- Economics and Econometrics
- Political Science and International Relations