Economics
Specialisation
Specialization refers to the process by which individuals, businesses, or countries focus on producing a limited range of goods or services in which they have a comparative advantage. This allows for increased efficiency and productivity, as resources are allocated to areas where they can be most effectively utilized. Specialization is a key concept in understanding the benefits of trade and the division of labor.
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4 Key excerpts on "Specialisation"
eBook - PDFMeasuring Regional Specialisation
A New Approach
- Katarzyna Kopczewska, Pawe? Churski, Artur Ochojski, Adam Polko, Pawe? Churski, Pawe? Churski, Pawe? Churski, Paweł Churski(Authors)
- 2017(Publication Date)
- Palgrave Macmillan(Publisher)
The concept of Specialisation has existed since the first economic theories. This is because Specialisation is one of the main types of behaviour (strategic process) made by workers, firms, industries, regions and countries in order to achieve higher productivity, increase competi- tiveness and improve the pace of innovation. The various theories differ primarily due to the different ways of explaining the causes of specialisa- tion, pointing out the different factors that may lead to Specialisation. These theories can be divided into those that take into account the spatial dimension and those that do not include this aspect. Another difference between theories occurs during formulation of the recom- mendations. They give various answers to questions: Whether, when and to what level should regions or countries be specialised? Generally the pros and cons of Specialisation and diversification are taken into account in many economic concepts. The explanation of the phenomenon of Specialisation is usually based on two types of theories. The first one focuses on explaining the rules of international trade, the other one focuses on explaining location patterns of economic activity. Taking into account the evolution of both groups, we can list the following theories: traditional trade theory and new trade theory; then economic geography and new economic geography. A good 2 1 Theoretical Framework of Regional Specialisation . . . literature review is offered by Wolfmayr-Schnitzer (2000), Brülhart (2001), Ceapraz (2008) and, last but not least, Paul Krugman (2008). At the beginning, we have to admit that in spite of differences between trade theory and location theory, it is not possible to assume that the first one explains Specialisation only at national level and does not take into account the spatial dimension, while the other one does not derive from neoclassical models that describe patterns of regional Specialisation.
eBook - ePubTechnology, Trade and Growth in OECD Countries
Does Specialisation Matter?
- Valentina Meliciani(Author)
- 2001(Publication Date)
- Taylor & Francis(Publisher)
We have seen that in neoclassical trade theory the impact of trade liberalisation is Specialisation according to comparative advantage and that free trade is beneficial to all countries. The implicit assumption behind this theory is that for each country it is indifferent about which goods to produce. This is the consequence of the neoclassical assumption of constant returns to scale and exogenous technical change. Specialisation is beneficial as it allows the exploitation of comparative advantages, and not for its effects on economies of scale or on learning opportunities; moreover the type of Specialisation (i.e. in which products or sectors countries specialise) has no relevance for countries’ economic performance.Figure 2.2 The impact of trade liberalisation in neoclassical growth theoryDevelopments of the neoclassical approach: the new growth and trade theories
New growth theories try to overcome some of the major drawbacks of the neoclassical growth theory: the dependency of long-run growth on unexplained exogenous technical change and the forecast of convergence in countries’ rates of growth and per capita income levels. They also allow the opening up of trade to have permanent effects on rates of growth, through scale and resource allocation effects. The new trade theory introduces monopolistic competition, product differentiation and increasing returns, in order to explain trade when not based on comparative advantage, and it reaches different conclusions on the gains from trade from the older neoclassical trade theory.
eBook - PDF- Y. Ng(Author)
- 2009(Publication Date)
- Palgrave Macmillan(Publisher)
In fact, in our present model with- out comparative advantage between individuals and between coun- tries, trade is inefficient without economies of specialization ( a 1), as shown in Yang and Ng (1993). In real economies, trade is facilitated by both exogenous comparative advantage and economies of specializa- tion (ignoring the relatively less important factor of the heterogeneity in preferences). For analytical clarity and to emphasize our point on trade for specialization, it is natural to abstract from the complication of exogenous comparative advantage.
eBook - PDFInternational Economics and Business
Nations and Firms in the Global Economy
- Sjoerd Beugelsdijk, Steven Brakman, Harry Garretsen, Charles van Marrewijk(Authors)
- 2013(Publication Date)
- Cambridge University Press(Publisher)
Can we say anything specific about trading patterns between countries? The answer is yes. We start with the most famous part of the answer, by introducing the concept of comparative advantage . Countries are often said to benefit from competitive advantages , or to suffer from a lack of them. We also briefly discuss the notion of competitive advantage in relation to comparative advantage . 23 Not only commodities and services can be traded, but also capital. In this chapter, we focus on international trade in commodities and services, as listed on the current account (see Chapter 2). In Part III of this book we turn to capital fl ows. Learning objectives * Understanding the notion of comparative advantage * Understanding the causes of comparative advantage * Understanding the differences between competitive and comparative advantage * Understanding the empirical relevance of comparative advantage 3.2 Comparative advantage: David Ricardo ’ s fundamental insight ............................................................................ The theory of comparative advantage is one of those ideas that separates economists from other people: it is a remarkable insight that, once understood, should remain in the toolbox of every economist. In the words of Paul Samuelson ‘ comparative advantage is one of the few ideas in economics that is true without being obvious ’ . 24 To avoid unnecessary complications we make a number of simplifying assumptions. There is only one factor of production: labour. This factor of production is perfectly mobile within countries, but cannot migrate across national borders. As a conse-quence the factor reward, in this case the wage rate, is therefore the same in di ff erent sectors within a country, but may di ff er between countries. Furthermore, markets are characterized by perfect competition. 25 This implies that we do not have to deal with strategic interactions between fi rms or consumers.
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