The Balassa index measures the degree of specialisation of Dutch export productse by comparing the shares of goods in total export with the share of the same goods in other countries, but the index does not measure whether the chosen export package of other countries is the most rational option. The index solely measures what is actually happening. The formula which applies in this article is: Balasssa index = (export value of good y from the Netherlands/total Dutch export value) divided by (export value good y from the rest of the EU 28)/total export value rest of the EU 28). An index > 1 (or < 1) means that the Netherlands is more (or less) specialised in export of that particular product than the rest of the EU 28.
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