RCA

Revealed Comparative Advantage

About RCA

The revealed comparative advantage is an index used in international economics for calculating the relative advantage or disadvantage of a certain country in a certain class of goods or services as evidenced by trade flows. It is based on the Ricardian comparative advantage concept.

It most commonly refers to an index, called the Balassa index, introduced by Béla Balassa (1965).


Calculation method:
Xij - value of tariff or sector exports
Xit - value of total exports
Xnj - value of import of tariff or sector
Xnt - value of total imports


Instructions for calculation


You need to create template in order to get your results. Fill in the templates with your data. For RCA and GLIIT only data on values for imports and exports are needed, while for TFCC and CI data on values and quantities for imports and exports are required. If you filled out the template properly, you upload the document and that's it. The results will pop up in a few seconds. In case you have a huge document, please wait, it may take a minute to calculate. In case something is wrong, please make sure you have filled in the templates correctly, that you have not accidentally changed something. If everything is fine and you have a problem, write to us.




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Interpretation of results


RCA is easy to interpret because they have only two categories; if below or above 1. If it's above 1, then is considered that RCA is showing a competitive advantage, and if it's below then it is considered that RCA is not showing a comparative advantage.


Interpretation of RCA results
Classification Explanation
0<RCA<1 RCA does not show a comparative advantage
1<RCA<∞ RCA shows a comparative advantage

For easier interpretation of the results and thanks to the capabilities of the software, it has been added cell coloring based on the value of the results. RCA is colored with a green gradient.


Coloring by RCA
         0          RCA does not show a comparative advantage
0.5 RCA does not show a comparative advantage
1 RCA shows a comparative advantage
5 RCA shows a comparative advantage
inf RCA shows a comparative advantage (infinite value)






This is how many times RCA is calculated!

+6