Author

Nimesh Salike and Benli Lu

Abstract

This paper examines the comparative advantage of a selection of 27 Nepal’s export products, of
which 16 are extracted from the Nepal Trade Integration Strategy (NTIS 2010) list of potential
priority exports. The primary purpose of this study is to investigate if these priority export
products are in alignment with the concept of comparative advantage. Balassa’s revealed
comparative advantage (RCA) index is used as the methodology for analysis while the data used
spans from 2000 to 2011. Empirical results show that out of the 16 NTIS 2010 potential priority
exports, only 10 are products which Nepal has comparative advantage in producing, major ones
being pashmina, wool and agro food products. The findings also reveal that there are at least
three other products- carpets, textile and juice that Nepal poses high RCA indices but are not
included under NTIS 2010 priority list.