@article{Funing:125636,
      recid = {125636},
      author = {Funing, Zhong and Zhigang, Xu and Longbo, Fu},
      title = {An Alternative Approach to Measure Regional Comparative  Advantage in China’s Grain Sector},
      address = {2001-01},
      number = {412-2016-25886},
      pages = {20},
      year = {2001},
      abstract = {Domestic Resource Costs (DRC) are widely used to measure  comparative advantages in production of any commodity in a  country. Basically, the DRC measures the opportunity costs  of producing specified goods with reference to border  prices for both inputs, especially imported and/or  tradable, and outputs. Once a foreign exchange rate is  chosen, a Domestic Resource Costs Coefficient (DRCC) can be  obtained by dividing the DRC with the exchange rate. If the  value of DRCC equals one, then the opportunity costs of  domestic production is exactly the same as the costs of  imports, or the foreign currency earned from exports. If  that value is less than one, it implies that domestic  production costs are less than imports. However, there is a  departure from classical Ricardo’s theory of comparative  advantage in the above approach. A Ricardian model requires  comparing production of two goods between two countries,  without counting domestic output prices and exchange rate.  A country may have DRCC values higher than one for two or  more products, which means it has comparative disadvantages  in all these produts. However, it must have comparative  advantage in at least one product. The same argument  applies to measuring regional comparative advantages within  a country. Therefore, in this study, the ranks, i.e., the  relative values, rather than the absolute values, of DRCCs  of will be taken as indicators of regional comparative  advantages in grain production among provinces in China.  The ranks of the DRCCs of various grain crops within any  specific province, which suggest the relative comparative  advantages in producing various grain crops in a province,  rather than the relative comparative advantages of various  provinces in producing a specific grain crop will be used  to show the direction of structural adjustment. Obviously  the two indicators are both important in measuring China’s  regional comparative advantages in grain production, and a  province’s comparative advantages in producing various  crops may be more important in determining the direction of  structural adjustment in that province.},
      url = {http://ageconsearch.umn.edu/record/125636},
      doi = {https://doi.org/10.22004/ag.econ.125636},
}