An RCA Analysis of Textiles and Clothing in Pakistan, India, and Bangladesh

Abstract

This study focuses on the revealed comparative advantage analysis for Clothing and Textile sectors of Pakistan, India and Bangladesh. We have applied the Balassa’s (1965) Index for the analysis. The revealed comparative advantage has been analyzed in two different ways: one static on the year 2010 and the other one dynamic based on 1980, 1990, 2000 and 2010. For the dynamic analysis, the average of the three previous years from 2010 were taken and used for revealed comparative advantage. The results show Pakistan’s highest revealed comparative advantage for textiles over both India and Bangladesh. India has revealed a comparative disadvantage in textile in competition of Pakistan and Bangladesh. For clothing, Bangladesh has very dominant revealed comparative advantage when competing with Pakistan and India. Dynamic revealed comparative advantage indicates Pakistan has been gaining a comparative advantage in textiles since 1980 but with a declining percentage of textile export. Bangladesh has significantly gained a comparative advantage in clothing since the 1980s.