A country that creates competitive advantage where there are not comparative advantages misallocates its resources and has lower national well-being.

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Comparative advantage refers to a country's ability to produce a particular good or service at a lower opportunity cost than other countries, while competitive advantage refers to a country's ability to produce a particular good or service more efficiently and effectively than other countries. If a country focuses on creating competitive advantage in areas where it has no comparative advantage, it may end up misallocating its resources and not achieving the optimal level of national well-being. This is because the country may be using resources that could be better utilized in other areas where it has a comparative advantage.

A Country That Creates Competitive Advantage Where There Are Not