Comparative advantage revealed

The revealed comparative advantage index, abbreviated VCR, allows to know the export specialization of a country. It is defined as the ratio between the share of a product in a country's exports and the share of that same product in world exports. A higher value (lower) to one indicates the presence (absence) of VCR in that product because, in relation to the total exported, it exports more than the world.

The VCR index of country A for good i is calculated as

VCR Ai = (X iA / X A) / (X iW / X W)

where X iA are exports of good i from country A, X A are total exports of country A, X iW are world exports of good i, and X W are total world exports.

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