Factors affecting the temporal changes in the revealed comparative advantage of the Philippine Textile and garment industry

• Main Authors: Burgos, Ryan Joseph, Canita, Camille Anthea, Martinez, Jesus Rafael, Sagabaen, Emil
• Format: text
• Language: English
• Published: Animo Repository 2013
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/10971
• Institution: De La Salle University

We described in our paper that for the Philippines to have a comparative advantage for garment exports, it must have a comparative advantage in its textile exports. By using Time-series regression, we determined macroeconomic factors that could affect the comparative advantage for garment and textiles. We also used Panel Data Regression to compare if these macroeconomic factors would also affect the neighboring ASEAN countries. The paper showed that Exchange Rates, Productivity of Labor, Availability of Energy in a country and Gross Capital Formation could help in the improvement of comparative advantage for both textile and garments. Also, by applying a lag for both garment and exports, it showed that the previous performance of comparative advantage of the two goods on itself could affect its present value. The paper concludes that the Philippines should focus in improving its comparative advantage in textiles before garments despite the fact that garments currently have a higher comparative advantage against the latter.