Fundamental Versus Granular Comparative Advantage: An Analysis Using Chess Data.

The Ricardian and Heckscher-Ohlin models of international trade contend that firms do not play any role in shaping countries' export specialization. However, the evidence shows that few firms dominate exports in many countries. This paper analyzes the relative contribution of fundamental (country) and granular (individual) comparative advantage to the differences in specialization across countries in a particular activity: chess. Using data on the quality of around 146,000 chess players in 106 countries in 2015, I find that fundamental comparative advantage is the main contributor to the variation in countries' specialization in chess. However, the contribution of granular comparative advantage becomes larger when analyzing specialization in very high-quality chess players. Despite the appearance of chess servers that allow playing online and offer tools to improve chess skills, I do not find convergence in fundamental comparative advantage over the period 2001-2015. [ABSTRACT FROM AUTHOR]