Revealed Comparative Advantage Index Research Articles

Competitiveness of Mexican vanilla (Vanilla spp.) in the international market

Objective: To analyze the competitiveness of Mexican vanilla in the international market. Design/Methodology/Approach: The relative trade balance (RTB) and the revealed comparative advantage index (RCAI) were calculated to analyze the competitiveness of the Mexican vanilla in the international market. Both crushed and whole vanilla beans were evaluated. Results: Around 1% of the total vanilla area is harvested in Mexico, representing 6% of the world production volume. The Mexican market is competitive in the international whole vanilla beans market, but not in the case of crushed or ground vanilla. Study Limitations/Implications: The SIAVI portal was discontinued. Therefore, the international vanilla trade data could only be retrieved for the period ending on November 2021. Findings/Conclusions: The Mexican market has potential for the development of vanilla production. However, current production is practically absorbed by the local market.

Analysis of Malaysia's Export Potential of Palm Oil and Its Products to RCEP Member Countries

This study explores the export potential of the Malaysian palm oil industry to RCEP (Regional Comprehensive Economic Partnership) member countries based on the regional economic framework. The panel data from 2018 to 2022 were analyzed using the Trade Gravity Model, RCA (Revealed Comparative Advantage), and TCI (Trade Complementarity Index) indices. The results categorize the fifteen RCEP member countries into three potential classes based on the type of potential. In addition, it was found that the trade complementarity of RCEP member countries showed a significant positive correlation with the export size of Malaysian palm oil and its products. The study provides insights into the trade pattern of palm oil in the region and provides a valuable reference for future trade policy formulation and industry development and provides a basis for research related to the sustainable development of the Malaysian palm oil industry.

TÜRKİYE'S INTERNATIONAL COMPETITIVENESS AND EXPORT PERFORMANCE IN THE TEXTILE SECTOR: COMPARATIVE ANALYSIS WITH THE WORLD'S TOP TEXTILE EXPORTER COUNTRIES

The textile industry plays a pioneering role in the development of developing countries. Türkiye in Eurasia, Germany and Italy in Europe, the United States in North America, China, India, Pakistan, Twain ve South Korea in Asia are among prominent countries in the textile sector. The textile industry maintains its importance in developed countries as well as developing countries. The aim of this study is to examine the competitiveness of the textile sector, which is one of the locomotive sectors in Türkiye and its export performance over rival countries which are the prominent countries in the textile export in the world market. Revealed Comparative Advantage (RCA) Index and Comparative Export Performance (CEP) Index were used in this study. RCA and CEP indices were calculated using data obtained from Uncomtrade database for the period 2001-2020. According to the calculated Revealed Comparative Advantage (RCA) Index results, It was determined that Türkiye had a competitive advantage in two-digit textile product group SITC 65 and in 7 of the 9 three-digit sub-product groups SITC (652, 653, 655, 656, 657,658, 659) had a competitive advantage, while the competitiveness in the SITC 651 sub-product group remained at the marginal limit. According to result of Comparative Export Performance Index, It was seen that Turkey has an advantage in export against all analyzed countries except Pakistan in SITC two-digit textile product group

Competitiveness Analysis of Pakistan’s Cotton Yarn Exports Relative to India and USA: A Demand System Application with Focuses on China’s Market

This study employed the revealed comparative advantage (RCA), revealed symmetric comparative advantage (RSCA) and Vollrath’s indices to measure Pakistan’s export competitiveness of cotton yarn in the world. Meanwhile, the country’s export competitiveness is evaluated using the comparative advantage by countries index in China, the world’s largest consumer of cotton yarn and Pakistan’s main export destination. Additionally, linear approximated almost ideal demand systems (LA/AIDS) is employed to anticipate the demand relations for exports of cotton yarn (Pakistan, India and the USA) in the Chinese market over the period 1991–2019. The value of RCA indices greater than one indicates that the country has comparative advantage in exports of cotton yarn in both the global and Chinese market. The findings also revealed that the nation’s comparative advantage position has decreased in global market while improved in the regional market of China. Furthermore, based on the approximation of restricted LA/AIDS model, the results affirmed that the exports of cotton yarn had high own-price sensitivity with negative signs, whereas cross-price sensitivity with positive signs. With regards to Pakistan’s exports, estimates of cross-prices indicate that China’s imports of yarn from Pakistan are substitutable for imports of yarn from India and the USA. In addition, the expenditure elasticity for India and US cotton yarn is greater than one, indicating that China viewed their exports of cotton yarn as quality good. On the other hand, the expenditure elasticity for Pakistan’s is less than one, but close enough to one, which reflects the cut-off point for exports of quality goods. Pakistan, therefore, needs to produce cotton yarn more efficiently by reducing costs and enhancing the reputation of quality to increase exports and market share.

Time stationarity, shape and ordinal ranking bias of RCA indexes: a new set of measures

AbstractA new set of tools to measure the time stationarity, shape and ordinal ranking bias of Revealed Comparative Advantage (RCA) indexes is suggested. The aim is to help select the most consistent RCA index for a given set of countries, products and time periods, which is especially relevant for economic policy based on comparative advantages. The GMM estimation of an AR(1) process based on RCA indexes provides three measures of time stationarity that are more rational than the measures available in the literature. Furthermore, we revise the statistics that are commonly used to capture shape. Finally, with respect to ordinal ranking bias, we modify the use of Spearman’s rank correlation coefficient in Leromain and Orefice (Int Econ 139:48–70, 2014) and generalize the non-parametric measure of Stellian and Danna-Buitrago (J Appl Econ 22(1):349–379, 2019). We discuss different methods of ranking RCA indexes according to all proposed measures. An application to 33 RCA indexes, 67 trade areas and three product classifications shows that, on average, the most accurate RCA indexes are Contribution-to-the-Trade-Balance indexes, Revealed Competitiveness indexes and regression-based indexes.

Competitiveness of Fruits' and Vegetables' Exports from India

"The study aims to evaluate the competitiveness of selected fruits and vegetables in India by using four revealed comparative advantage (RCA) indices from 2001 to 2019 based on International Trade Centre (INTRACEN) database. The results revealed that out of 25 selected fruits and vegetable products, only seven product groups namely onion fresh, cucumber & gherkin, dried vegetables, cooked or uncooked vegetables, cashewnut shelled, guava & mango and tamarind showed comparative advantage in all the RCA indices. While other fruits and vegetables exhibited comparative disadvantage in a few RCA indices. To measure the consistency across different measures of RCAs, the study used three consistency tests, namely, cardinal, ordinal, and dichotomous tests. The findings indicate that the four indices exhibit greater consistency when measured as an ordinal scale, while showing less consistency when measured as cardinal or dichotomous scales. Moreover, stability of these indices was also revealed in the analysis. The study also suggested specific strategies to boost fruits and vegetables products’ exports."

Daya Saing Biji Kakao di Pasar Malaysia

Di pasar Malaysia, biji kakao Indonesia bersaing dengan biji kakao dari negara-negara di Afrika Barat yang memiliki standar kualitas yang tinggi dan lebih disukai oleh konsumen. Tujuan dari penelitian ini adalah untuk mengetahui nilai ekspor, produksi, produktivitas kakao, posisi perdagangan dan daya saing biji kakao Indonesia dengan pesaingnya di negara-negara Afrika Barat (Pantai Gading, Ghana, dan Nigeria). Metode penelitian ini menggunakan Trade Specialization Index (TSI), Revealed Comparative Advantage (RCA), Export Product Dynamics (EPD), dan X-Model. Data yang digunakan adalah dari tahun 2000 - 2020. Hasil penelitian menunjukkan bahwa posisi perdagangan biji kakao di Indonesia, Pantai Gading, dan Ghana berada pada posisi pertumbuhan ekspor (nilai TSI meningkat antara 0-1). Sementara itu, Nigeria berada pada posisi kematangan ekspor (nilai ISP menurun antara 0 - 1). Rata-rata indeks RCA biji kakao: a). Indonesia = 3,92 ; b). Pantai Gading = 1,44; c). Ghana = 7,28; dan d). Nigeria = 173,13. Berdasarkan hasil EPD, Indonesia berada di posisi Lost Oppurtunity, Pantai Gading di posisi Falling Star, Ghana di posisi Retreat, dan Nigeria di posisi Rising Star.

Measuring The Competitiveness of Footwear in The Global Market: A Comparison Study of Indonesia and Cambodia

This study aims to compare the competitiveness of Indonesian and Cambodian footwear in the global market. Indonesia’s export value increased over the year, but in 2019 it significantly decreased. The footwear industry has grown negatively since 2019, and during the pandemic, the growth rate is -8.76%. In contrast, since 2019, Cambodia has become the 10th world's footwear exporter. It is undoubtedly a threat to Indonesia, so it is necessary to make various strategies to increase Indonesia's competitiveness. Revealed Comparative Advantage (RCA) and Export Dynamic Product (EPD) methods measure the competitive position. This study uses secondary data in the form of annual export from 2011 to 2020. The results show that Indonesia has a comparative advantage over the world but is moderate, with an RCA value of 3.81. Cambodia has more competitively than Indonesia, with an RCA index of 8.22. Even though in 2020 it experienced negative growth, Indonesia's footwear both comparatively and competitively increased. The RCA index value increases and the EPD is in the best position, "the rising star". Indonesian products have high market attractiveness and market share in the global.

Competitiveness of Namibia’s Agri-Food Commodities: Implications for Food Security

The global literature widely uses Revealed Comparative Advantage (RCA), Lafay Index (LFI), Export Diversification (EDI), Hirschman (HI), and Major Export Category (MEC) to analyze international trade flows, though agricultural trade, specifically agri-food commodities consisting of food and feed commodities, is neglected in empirical works. Furthermore, the determinants of Revealed Comparative Advantages and the Lafay Index have received little attention, with little focus on the relationships between food insecurity as measured by the Household Food Insecurity Access Scale (HFIAS) and the aforementioned factors, including the RCA and LFI indices as explanatory variables with other macroeconomic variables. The purpose of this study was to ascertain the competitiveness of Namibia’s agri-food products, the factors that influence it, and their implication for food security. This study attempts to answer which factors affect agri-food comparative advantage, which agri-food commodities have a comparative advantage and disadvantage, and what the implications are to food security. The study employed regression analysis, the Household Food Insecurity Access Scale, and various indices. Revealed Comparative Advantage and Lafay Index indicated a mixed result during the study period. Export Diversification and Hirschman indices indicated a less concentrated trade structure throughout the study period. The results of the market structure of the international agri-food market estimated by the Major Export Category revealed that Namibia was unduly dependent on agri-food commodities incorporated in this study. The regression result showed a significant negative influence of labor and land productivity on the aggregated RCA and LFI for agri-food commodities. Land productivity and GDP per capita impact the degree of food insecurity in Namibia. The study concludes that Namibia was not dependent on international trade of agri-food commodities and had little bearing on food security. These analyses enlighten policymakers about the competitiveness of the agri-food business and its implications for food security through evidence-based policy development.

Dinâmica e competitividade das exportações de melão no estado do Ceará - 2000-2020

This article aims to analyze the evolution of melon exports and competitiveness in the state of Ceará between the years 2000 to 2020. Methodologically, a literature review was used and, subsequently, international trade indicators were constructed, respectively, to Regional Orientation. Index (IOR), the Vollrath Revealed Comparative Advantage Index (IVCRV) and the Exports Revealed Competitiveness Index (CR). The results show that the state of Ceará increased its participation in melon exports in the sum of Brazilian exports, also resulting in an increase in the average price obtained per kilo of fruit. Finally, from the proposed indicators, it appears that Ceará's melon exports are strongly oriented to the United Kingdom. Regarding the competitiveness indicators, it was proved that the melon from Ceará has a comparative and competitive advantage revealed over the period analyzed in this study.

Assessment of Sri Lankan Cinnamon Export Competitiveness in the Global Market

Cinnamon is the most valuable and important spice export crop in Sri Lanka which accounts over 85% of the world cinnamon exports. Competitiveness is one of the major challenges in cinnamon trade in an era of free trade. Intense competition faced by Sri Lanka with other countries results in adverse impacts on cinnamon trade thus decreasing its potential trading opportunities. This study aims to analyze the export competitiveness of Sri Lankan cinnamon in the world market. The study also considers the world’s top 10 cinnamon exporters. The contribution of this paper is that it measures the comparative advantage using a range of indexes namely the Balassa Revealed Comparative Advantage Index (BRCA), Additive Revealed Comparative Advantage Index (ARCA), Normalized Revealed Comparative Advantage Index (NRCA), Revealed Symmetric Comparative Advantage Index (RSCA) and Trade Balance Index (TBI) for the period from 2001 to 2020. Data are extracted from the International Trade Center (ITC) trade map (COMTRADE) database. BRCA (566.49), ARCA (0.01207), NRCA (7.28*10-6), and RSCA (0.996) result indicate that Sri Lanka has the highest comparative advantage in the global cinnamon export market. Madagascar (0.999) has the highest TBI value. The result of product mapping indicates that Sri Lanka, Madagascar, Vietnam, Indonesia and China have both comparative advantage and positive trade balances over other countries.

Competitiveness and determinants of Indonesia's natural rubber exports in main partner countries

The main destination countries play an important role in Indonesia's natural rubber exports, as most of Indonesia's natural rubber is exported to these countries. The purpose of this study was to examine the comparative advantage and determinants of Indonesia's natural rubber exports to major partner countries. The RCA (Revealed Comparative Advantage) index is used to assess the comparative advantage, and panel data regression analysis is used to analyze the determinants of exports to the main partner countries (USA, China, Japan, India, Republic of Korea, Brazil, Canada, Germany, Belgium and Turkey). The results of this study indicate that Indonesian natural rubber has a comparative advantage in the main partner countries, which are characterized by RCA index >1. In addition, it was determined that based on panel data regression, the increase in the world price of natural rubber and export restriction policies have led to a decline in natural rubber exports from Indonesia. It is found that the population of Indonesia reduces exports, while the population of partner countries increases exports due to population growth, which will increase the consumption of natural rubber. On the other hand, the increase in Indonesia's gross domestic product (GDP) will lead to an increase in natural rubber production capacity, which will contribute to an increase in exports. It is found that the previous year's demand was also taken into account by partner countries that import Indonesian natural rubber. The results of this study can be useful for the Indonesian government and stakeholders (such as natural rubber producers and exporters) to identify strategies to improve export performance

Analyzing relative export competitiveness of Indian agricultural food products: a study of fresh and processed fruits and vegetables

PurposeGiven the dominant share of India in global production of fruits and vegetables, this paper intends to analyze the export competitiveness of India and other major food exporters in the world trade. The purpose of this study is to examine export structure, substitutability and complementarity of selected fresh and processed fruits and vegetables of top ten food exporters for the period 2010-20.Design/methodology/approachBalassa’s (1965) revealed comparative advantage (RCA) index was used to measure RCA indices of selected fruits and vegetables under study. Also, revealed symmetric comparative advantage (RSCA) and normalized RCA (NRCA) indices have been calculated. Further, Spearman rank correlation coefficients were computed to analyze changes over the study period for India and other competing countries. The export data have been sourced from UN Comtrade, an electronic database of United Nations, as well as World Trade Statistical Review, a database of World Trade Organization. The analysis was undertaken at Harmonized System (HS) four-digit classification for the period 2010-20.FindingsThe results disclosed an improvement in India’s comparative advantage over the period of 2010-20 in HS 07 product category, whereas the advantage ceded to other competitive nations in HS 08 product category. Further, Spearman rank correlation coefficients revealed that India faces competition from countries like China, Indonesia, Brazil, Thailand, Argentina and European Union for HS 07 product category, while countries like Mexico, Indonesia, Brazil and Thailandare the major competitors of India in HS 08 product category.Originality/valueThe paper expands the existing agricultural trade literature in three ways. First, it is one of the very few studies that have analyzed RCA for Indian fresh and processed fruits and vegetables using three different types of indices, namely, Balassa’s RCA, RSCA and NRCA. Second, the authors provide a number of comparisons related to RCA for Indian fruits and vegetables with other top food exporters in the world for a period of 10 years (2010-20). Third, the authors contribute to agricultural trade literature by assessing the substitutability or complementarity of India in the export of fruits and vegetables with other competing nations by using Spearman rank correlation coefficients.

Analysis of Competitiveness and Forecasting of Indonesian Tea Exports to Main Destination Countries

<p>Indonesia as a tea exporter in the world has not maximized tea export opportunities as indicated by the decline in the value of tea exports from 2016 to 2020. This study aims to further analyze the competitiveness of Indonesian tea exports to major importing countries and predict the value of exports that will occur until 2025. This study used time series data from 2001-2020 which was analyzed with Revealed Comparative Advantage (RCA) and Autoregressive Integrated Moving Average (ARIMA). The results of the analysis show that the competitiveness of Indonesian tea exports to the main destination countries, namely Russia, Malaysia, China, Taiwan, and the United States, does not have a comparative advantage (RCA<1). However, based on forecasting results, the value of tea exports to Russia, Malaysia, and China is expected to increase until 2025. This increase in tea export value also has an impact in the form of strengthening the competitiveness of Indonesian tea exports in these countries even though the RCA index value is smaller than one. Thus, although the competitiveness of Indonesian tea exports is still weak in destination countries, Indonesia can optimize tea exports to countries that have increased competitiveness, such as Russia, Malaysia, and China.</p>

Unlocking Markets: Assessing Pakistan’s Trade Potential with the Gulf Cooperation Council Members

This study examines the trade potential of Pakistan with the countries of the Gulf Cooperation Council (GCC). Trade potential is estimated using the RCA (Revealed Comparative Advantage) index technique, utilizing HS-8 tariff line level data from 2007 to 2021. Our findings identify 102 products at the tariff line where Pakistan enjoys a comparative advantage. These products span various sectors, including copper, iron, steel, minerals, wood, pharmaceutical, paper, tobacco, sugar, and plastic. Furthermore, the paper discusses the trade hindering effect of factors such as the absence of effective trade agreements, shortage and high energy prices, and other high input costs

Competitiveness and Determinants of Indonesian Plywood Export

Since 1998, Indonesia has been the largest plywood exporter in the world. However, at this time, Indonesia’s position no longer dominates; even the plywood export volume and value tend to decline. This condition is determined by many factors and is closely related to the competitiveness concept. Therefore, this study aimed to analyze the competitiveness, determinants, and export potential of Indonesian plywood. This study uses panel data from 11 major trading partner countries from 2004 to 2020. The data analysis method used in this study includes Revealed Comparative Advantage (RCA), gravity model, and trade potential analysis. The results show that Indonesian plywood has strong competitiveness in 11 major trading partner countries with a positive growth trend. The estimation of the gravity model shows that the importer population, economic distance, and the RCA index have a positive effect on Indonesian plywood exports. In contrast, Indonesia’s real GDP, importers’ GDP, exchange rates, and export prices are negatively affected. The population of importers is the most significant elasticity variable. Indonesia still has the potential to expand in 11 major trading partner countries because of the plywood under-trade current condition. So, development efforts on plywood exports should be aimed at under-trade countries and large populations. Keywords: export, gravity model, panel data, Revealed Comparative Advantage, trade potential ratio

Competitiveness of Pineapple: Focus on The Southeast Asian Region

Pineapple, scientifically known as Ananas comosus var. MD2, is a tropical fruit that is low in saturated fats and cholesterol, and is widely sought after in the international market due to its nutritional value. Recently, there has been concern over a downward trend in the output of Malaysian pineapples, as documented in Fruit Crops Statistic 2019. Due to the reduction in pineapple production area from 14,700.00 hectarage to 12,898.44 hectarage, this was considered to be statistically significant because the pineapple production comparison had a rapid declining tendency. Thus, this making the study significant to clarify Malaysian competitive on exporting pineapple in global market. The purpose of this study is to examine pineapple export competitiveness in Southeast Asia (Malaysia, Thailand, Indonesia, and Vietnam) from 2010 to 2020 by comparing Revealed Comparative Advantage (RCA) and Revealed Symmetric Comparative Advantage (RSCA) over a five-year period (RSCA). According to the findings, Malaysia does not have a competitive advantage in terms of pineapple exports to the rest of the globe in either the RCA or RSCA indices when compared to Thailand, Indonesia, and Vietnam.

Competitiveness of Mangoes in Southeast Asian Region

The mango is one of the world’s most valuable and economically significant tropical fruits, and it is grown all over the world. Mangoes are in high demand on the global trade market, and European countries are one of the most promising growth markets for mango exports. The chairman of Malaysia’s Federal Agricultural Marketing Authority (FAMA) expects “Harumanis” mangoes to be exported to Europe within the next three to four years. This brings into sharp focus the issue of mango plantation land in Malaysia, which is currently the subject of heated debate because Perlis is Malaysia’s smallest state and is attempting to dominate this commodity. According to a report from Malay Mail News on June 2020, the Intellectual Property Corporation of Malaysia (MyIPO) has stated that the name “Harumanis” is only used for mango grown in Perlis. This appears to be a strategic plan that benefits Perlis by confusing consumers about which mango (Mangifera indica L.) to buy, and the “Harumanis” name itself has branding value in the Malaysian market. To investigate further, this study will examine the competitiveness of Malaysia compared to countries around Southeast Asia that have vast land for the agricultural and their competitiveness in exporting mango by using Revealed Comparative Advantage (RCA), Revealed Symmetric Comparative Advantage (RSCA) and export growth. Malaysia lacks a competitive advantage in both the RCA and RSCA indexes, which may be attributed to the fact that Malaysia has the least agricultural land and production of mango in comparison to Thailand, Indonesia, and Vietnam.

A Comparative Analysis of Competitive Trade in a Cluster Market of the European Union: The Revealed Comparative Advantage (RCA) Index

Abstract This research is concerned with the comparative analysis of competitive trade within the cluster market economies of the European Union. The aim of this paper is to carry out trade analysis within the competing countries in the European market from 2009 to 2018 which represents the period after the global crisis of 2008 and prior to the Covid-19 pandemic of 2019 for the purpose of determining the extent of competitive trade within the European economies. The chosen metric is Béla Balassa’s Revealed Comparative Advantage (RCA) index used for determining various countries’ comparative advantage or disadvantage in trade. The findings show that the countries with RCA > 1 thrive economically in comparison to other competing lower economies. And the fact that the European Union economy thrives on mechanized trade other than agricultural products irrespective of the competitive market. This study is a significant contribution towards improving the Ricardian model of comparative advantage on trade within a cluster market in the European economies.

Analysis of Export Competitiveness of Natural Rubber from Indonesia and Thailand in the International Market

Natural rubber is one of the commodities that plays an important role as a foreign exchange earner. This study aims to determine how the competitiveness of natural rubber in Indonesia and Thailand as the main producers in the world market. The data used in this study is the volume of exports and imports of natural rubber in Indonesia and Thailand for 15 years in the 2004-2018 period. This research uses Revealed Comparative Advantage (RCA) analysis to analyze comparative advantage and Trade Specialization Index (ISP) to analyze competitive advantage. The RCA analysis results in world markets, the United States market and the Chinese market show a number of more than 1 which means that natural rubber in Indonesia and Thailand have strong competitiveness or comparative advantage. However, in the world market and the United States market the value of the Indonesian natural rubber RCA index is higher than the Thai RCA index value so that the competitiveness of Indonesia's natural rubber is stronger than Thailand, while in the Chinese market the value of the Thai RCA index is the opposite. Indonesia and Thailand ISP Index values show positive results, indicate that these two countries have a tendency to be an exporter of natural rubber commodity in the world market, the American market, and the Chinese market.