On the duration of comparative advantages: The case of european cheese industry

Abstract

The EU produces and exports various types of cheese to all over the world. French, Dutch and Italian cheeses are very special and famous worldwide. By contrast, to date, the analysis of the competitiveness of EU cheese trade is understudied in the literature. Therefore, our paper is focusing on the evaluation of trade competitiveness in European cheese sector. First, our study analyses the revealed comparative advantages among the major European cheese producers by Balassa indices between 1990 and 2013. Second, we aim to explore the duration and stability of indices by the help of lagged indices and calculating Kaplan-Meier survival functions. Our results suggest that European cheese export is mainly internal in nature and highly concentrated. Regarding comparative advantages, indicators suggest that the Netherlands, Denmark, and Cyprus were the most competitive cheese traders in the EU. However, the survivor analysis revealed that the comparative advantages were very stable for the countries selected the overall stability of EU cheese trade had a declining tendency. © 2018, Agricultural Academy, Bulgaria. All rights reserved.