Export Unit Price Research Articles

Competitiveness of Sri Lankan Tea in the International Market: A Trade Flow Analysis

For more than 150 years, Sri Lanka has had a significant influence on the world market for tea. Sri Lanka is one of the world's top producers and exporters of tea. However, Sri Lanka's tea industry encounters a number of challenges due to internal and external market conditions, including governmental regulations, rising labour costs, and supply chain disruptions. These challenges can affect the competitiveness of Sri Lanka’s tea exports in the global market. Therefore, it is important to understand how the competitiveness of Sri Lankan tea exports in the global tea market changed over time. The specific objectives of the study were to examine the relative contribution of Sri Lanka’s tea exports to the international market and to assess the level of competitiveness of Sri Lanka’s tea exports. Based on the positivist research philosophy and quantitative approach, this study adopted four indexes to assess the level of competition. These indices include export market share (MS), export unit price (EUP), revealed comparative advantage (RCA), and revealed trade advantage (RTA). The study's findings demonstrated that while the export unit price exhibited an upward trend, Sri Lanka's market share in the world tea market has decreased over time. According to the findings of the RCA and RTA indices, Sri Lanka's competitiveness in terms of international tea exports has continuously decreased. Kenya, on the other hand, has witnessed a rise in tea export competition, while China and India have seen a decline in tea export competition. This study emphasizes the need for implementing efficient production methods in order to provide Sri Lankan tea to the global market at a lower price. Additionally, government policies ought to focus on offering technical assistance to boost productivity in the Sri Lankan tea industry.

Indonesian Coffee Development Path: Production and International Trade

Aims: The objectives of this study are (i) to compare Indonesia's coffee production efficiency among the top five world coffee-producing countries, (ii) to analyze Indonesia's coffee competitiveness against major world coffee producers in the international market, and (iii) to analyze Indonesia's coffee export structure based on unit price of export price to determine profitable differentiation of export destinations.
 Methodology: A descriptive comparative analysis was conducted on coffee productivity (kg/ha) in the major coffee-producing countries and on the export unit price (USD/ton) received by Indonesia and other exporting countries. To reveal the comparative advantage of Indonesian coffee in the global market, Symmetry Revealed Comparative Advantage (RSCA) is employed, and GL-Index is utilized as an analysis tool for export destination differentiation.
 Results: The results of this study are (i) Indonesian coffee production is very low due to various factors, including production techniques that do not apply innovation to increase production, (ii) the composition of production is dominated by Robusta Coffee which is known to get a lower price than Arabica Coffee, (iii) exports are in the form of low-quality products so that they attain a meager unit price even though Indonesian coffee has competitiveness with SRCA> 0, and (iv) GL-Index analysis shows that the most profitable export destinations for Indonesian coffee are to the United States and Australia and New Zealand, while contrary to what has been assumed, exports to West Europe, Northeast Asia and Middle East and North Africa do not show conclusive results while ASEAN (Association of Southeast Asian Nations) is not a profitable export destination.
 Conclusion: Indonesian coffee needs to be improved at various supply chain stages, especially at the production and export levels. Appropriate policies to address the weaknesses of Indonesia's coffee position have the potential to catch up with the existing productivity and export gaps.

Growth and Instability of International Trade of Jute in India

India is the largest producer of jute in the world. Among the important jute producing countries in the world, India had gained the first position in 2020 by producing about 1807 thousand tonnes of jute on an area of 691 thousand hectares and contributing a share of 67.21 and 49.47 per cent to the world’s total production and area of jute, respectively. In the present study efforts have been made to examine the growth performance of international trade of jute in India. The study was based on secondary data for the period of 30 years (1989-90 to 2018-19). The collected data were sub-divided into three periods, and the exponential growth function was used to anlysed the growth rates of jute. The instability in area, production, productivity, export and import were measured by Coppock’s Instability Index (CII) and Cuddy Della Valle’s Instability Index (CDVI). The results of growth rate showed negative trend in area of jute but production and productivity showed positive growth rates over the study period. All the parameters viz., export quantity, export value, export unit price, import quantity, import value and import unit price shown positive growth rates during overall period and found to be significant at 1 per cent level of significance. It was concluded that, India has been associated with moderate degree of variability in the jute production and productivity in the first sub period and this variability has been reduced significantly during the second and third period, while area recorded less variability during the study period. All the parameters viz., export quantity, export value, import quantity and import value have experienced high instability while the export unit price and import unit price registered stability during the study period.

An Analysis on the Improvement of China's Product Export Competitiveness to the United States based on Production Division

본 연구는 2008년 금융위기 이후 중국과 미국의 무역마찰 증대와 무역촉진 현황을 양국의 무역 관계, 규모, 구조에 대한 생산 분업의 영향을 고려하여 중국 상품의 미국 수출경쟁력을 표준국제무역분류기준(SITC)에 따른 가치사슬 관점과 개선된 지수를 바탕으로 재검증하고자 하였다. Section 8에서는 중국이 미국에 비해 수출가치, 수출강도, 수출단가, 무역 보완성 측면에서 현저한 이점을 지니고 있어서 대미 수출경쟁력을 보이는 것으로 확인되었다. 대미 무역적자로 분석된 Section 5와 대미 무역흑자로 파악된 Section 6 모두 중국의 대미 수출 단가가 상대적으로 높게 나타났다. Section 7에서는 미국에 대한 수출 단가는 높지만 수출 강도가 다소 낮아 중국이 기술집약적 제품에서 미국에 대한 수출경쟁력이 상대적으로 약한 것으로 확인되었다. 중국의 대미 경쟁력을 추가적으로 검증하기 위해 일본, 인도, 러시아, 말레이시아, 태국을 비교대상으로 선정하여 분석한 결과 중국은 비교 대상 국가들에 대한 수출경쟁력이 유의미하지 않은 것으로 나타났으며, 특히 일본에 대한 자본 및 기술집약산업에서 수출경쟁력이 유의미하지 않은 것으로 나타났다. 이를 바탕으로 중국 경제규모, 1인당 소득, 기술연구개발 및 제도의 4가지 격차, 상호직접투자 요인을 설명변수로 설정하여 중력모형을 이용한 패널 실증분석을 수행하였다. 분석결과, 중국 경제의 점진적 성장은 수출경쟁력을 효과적으로 향상시키지 못했던 것으로 나타났으며, 과거 다른 나라의 직접투자를 흡수함으로써 중국이 기술적 어려움과 대외무역의 지속적인 마찰이 초래하게 되었던 것으로 파악되었다. 대외직접투자와 자체적인 제도의 개선은 긍정적인 역할을 하였지만, 대외투자 규모, 주최국 수요 능력, 제도 보완에 국한되어 있어서 장기적으로 중국 상품의 수출경쟁력을 단기간에 개선하기는 어려운 것으로 파악되었다. 마지막으로, 중국이 국내외의 관점에서 지속 가능한 상품 수출 경쟁력을 제고할 수 있는 방안을 논의하였다.This study aims to re-verify the export competitiveness of Chinese goods to the U.S. based on the value chain perspective and improved index according to the SITC, considering the influence of the division of production on the trade relations, size and structure of the two countries after the 2008 financial crisis. In Section 8, China has a remarkable advantage in terms of export value, export intensity, export unit price, and trade complementarity compared to the US, which shows that it has export competitiveness to the US. In section 5 and section 6, China s export unit price to U.S. is relatively high, with the former’s trade deficit and the latter’s trade surplus to U.S. In section 7, the export unit price to U.S. is higher, but the export intensity is somewhat lower, which indicates China has relatively weak export competitiveness to U.S. in high technology intensive products. In order to further verify China s competitiveness in the US, Japan, India, Russia, Malaysia and Thailand were selected as the comparative subjects and analyzed. As a result, China s export competitiveness was found to be insignificant for the comparable countries, especially in the capital and technology-intensive industries for Japan. Based on this, China s economic scale, per capita income, technology research and development, institutional gap, and mutual direct investment factors were set as variables and panel empirical analysis using gravity model was conducted. The analysis showed that the gradual growth of the Chinese economy did not effectively improve its export competitiveness, and it was found that by absorbing direct investment from other countries in the past, China had caused technical difficulties and continued friction in foreign trade. While the improvement of foreign direct investment and its own institutional system played a positive role, it was found that it was difficult to improve the export competitiveness of Chinese goods in a short period of time because it was limited to the scale of foreign investment, host countries’ demand capacity and institutional supplementation. Finally, we discussed ways for China to enhance its competitiveness in exporting sustainable goods from both domestic and foreign perspectives.

What Makes the Difference in Raw Material Equivalents Calculation Through Environmentally Extended Input-Output Analysis?

This article describes an approach to improve the Czech model for raw material equivalents (RME) calculation to meet the standards of the Eurostat RME model. It also critically discusses the approach and suggests that some model features need revision. The improvements include further disaggregation of input-output tables; improvement of life cycle inventory data; hybridization of selected product groups; revaluation of imports at domestic prices; and adding additional information on recycling ratios for metal imports and the energy mix of electricity imports. It is shown that those improvements have a significant impact on RME of imports and exports (a decrease by 48% and 38%, respectively). The article further compares results for RME of imports and exports from the improved Czech RME model and the Eurostat RME country tool. These results differ by 24% and 16%, respectively, on an aggregated level, but the difference is much larger for particular material categories. Further improvements of the Eurostat country tool, such as a correction for unit prices of exports, are therefore recommended.

Structural Changes of the U.S. Economy: Implications for the U.S. Mid- to Long-Term Growth Path and the Korean Economy

As shown in various data, during the 2008-2009 financial crisis period, the real GDP of each country recovered slowly after a sharp decline, but is recovering differently in each country. In the case of the United States, it shows a rapid recovery compared to Japan and Europe. Despite the rapid recovery compared to other developed countries, there are still many people who harbor doubts regarding the mid- to long-term growth path of the U.S. economy. In the mid- to long-term, the growth potential of the U.S. is limited to the mid-1% range, and renowned economists such as Larry Summers and Paul Krugman are questioning the U.S.'s long-term growth by insisting on its secular stagnation. The U.S. mid- to long-term growth path will have a crucial impact on the future growth of the global economy in light of the U.S. weighting in the global economy. Especially, in the case of Korea, export is still a large part of the economy and the mid- to long-term growth of the global economy accounts for a large portion of Korea's mid- to long-term growth. In this situation, it is important to find a way to accelerate economic recovery through benchmarking of U.S. growth policies. We use the growth accounting method to diagnose whether the U.S. will grow in the medium-to-long-term. Growth accounting is a method for analyzing the effects of supply side factors such as labor supply, total factor productivity, and labor quality on mid- and long-term growth, and is particularly appropriate for analyzing the impact of trend growth decline. The results of the analysis are as follows. According to labor supply factors, such as the degree of population aging, the quality of education and productivity, the U.S. economic potential growth rate is found to range from 1.4% to 2.9% on average by 2060 unless the effects of the aging of its population are reduced or there is a rapid increase in productivity due to the recent 4th industrial revolution. In spite of the not-so-great mid- to long-term growth path of the U.S., why is the U.S. recovering faster than other developed countries after the financial crisis? One important reason is active monetary and fiscal policy. During the financial crisis, the U.S. Fed cut its policy rate to zero and conducted quantitative easing. Furthermore, the American Recovery and Reinvestment Act (ARRA) was enacted by the Obama administration to carry out a huge-scale fiscal stimulus package to boost the economy. In addition to these monetary and fiscal policies, supply side policies such as R&D investment played an important role to support the fast recovery. Based on the macroeconomic model that we build, we examined the impact of the decline in trend growth on the economic recovery and searched for the reasons of the rapid recovery of the U.S. Productivity is recovering faster in the U.S. than other countries after the financial crisis. The results of the model analysis show that the recovery of productivity reduces the decline of trend growth, and this better trend growth is positive for current consumption and investment as it improves expectations for future income increase. This rapid U.S. productivity recovery can be attributed to the large-scale national R&D initiated during and after the financial crisis. The policy implications suggested in this paper can be divided into two major categories. First, the implications for the mid- to long-term foreign policy are as follows. The U.S. is Korea's second largest export market and has a large impact on the global economy. The Korean economy is still highly dependent on exports. Considering this point, we need to diversify our export markets, increase export unit price through development of high value-added products, and develop core goods that are less affected by economic fluctuations. In addition, Korea's mid- to long-term growth strategy suggestions are as follows. As a result of supply side analyzing of the growth rate of Korea, the recent decline in growth rate is caused by productivity decline, decrease of capital accumulation, and low contribution of labor supply. Therefore, it is necessary to implement investment promotion policies similar to productivity improvement and innovation-related policies actively promoted by the Obama administration. Finally, the implications for national R&D policy for mid- to long-term growth are as follows. Korea's R&D spending is quantitatively the top among OECD countries. However, the uncertainty of its R&D spending is much higher than in the U.S. Uncertainty as a result of increased volatility in R&D expenditure may result in lower efficiency of R&D spending by hindering stable research. In Korea, it will be important to benchmark such a system to ensure the sustainability of R&D investment and raise efficiency.

THE CHANGE IN WORLD PRICE AND EXPORT TAX OF CRUDE PALM OIL AND THEIR IMPACT ON THE ECONOMY AND WELFARE IN INDONESIA: USING A COMPUTABLE GENERAL EQUILIBRIUM (CGE) MODEL

The research aimed to analyze the impact of change in world price and export tax of crude palm oil on the export and domestic production performance of some selected economic sectors, as well as households’ welfare in Indonesia. The analyses were carried out by a Computable General Equilibrium (CGE) static model with data taken from Indonesian Social Accounting Matrix (SAM) 2008. The results showed that the increase in world price accompanied by the increase in export tax of crude palm oil and rupiah depreciation have positive impact on the export and domestic production performance of palm oil manufacture sectors and other related economic sectors. Prevailing progressive tax on crued palm oil export does not have negative impact resulted in decreasing palm oil export because export unit price received by producers remains higher than the price at baseline. Due to the increasing of export performance and domestic production, production sectors have economic ability to meet the demands of paying higher value-added upon primary production factors owned by households so that households’ factor income increase and eventually, it leads households’ welfare increase as well.

Determinants of Turkish Exports to European Union Countries: A Sectoral Panel Data Analysis

ABSTRACTIn this study, the structure of Turkish exports to ten EU countries (Belgium, France, Germany, Greece, Hungary, Italy, Poland, Romania, Spain, and the United Kingdom) and the European Union total are examined and compared. For each country, the cross-sectional dimension is manufacturing industry sectors, and the time dimension is between 2003Q1 and 2012Q2. The estimation methodology is augmented mean group. In the regressions, the statistically significant variables affecting Turkey’s exports to various EU countries are Turkey’s industrial production index and sectoral export unit price index, partner country’s sectoral imports from the World, and partner country’s import prices. Seasonal dummies are added to account for seasonalities in the data, and a crises dummy is added to see the effects of recent crises. This study enables us to analyse Turkey’s exports to EU countries across time, sector, and country dimensions and make policy suggestions.

A Comparative Analysis of the Export Performances of China and India: Evidence from US Imports

 Abstract—This paper compares the export performances of China and India, the two largest labour-abundant countries. The empirical analysis of the paper is based on US imports from these two countries at the ten-digit level for 1992-2012. The paper examines the composition of exports from China and India, the degree of concentration of exports, and the extent of export similarity. The paper also explores the nature of product differentiation based on unit prices of exports from China and India. The empirical analyses show that China's shares in the US market, for both high-technology products and labour-intensive products, are substantially higher than that of India. Furthermore, China's export basket, compared to India's, is more diversified, and that the extent of export similarity between China and India in the US market is quite low. The data on unit prices of exports suggest that China has outperformed India in vertically differentiated products.

Export-led growth: are the results robust across methodologies and/or data sets? A case study of Latin America

We examine the export-led growth (ELG) hypothesis from a different perspective asking if the choice of data and/or methodology drives the results. We apply the Granger causality test modified by the corresponding error correction model using real export data from two common sources: the International Monetary Fund and the United Nations Commodity Trade Statistics. Additionally, to determine if the level of deflation could be a factor, we deflate the data at a disaggregated level and by a single export unit price index. Outcomes are compared to those obtained through the Granger causality procedure developed by Toda and Yamamoto (1995) and Dolado and Lütkepohl (1996). We use sixteen Latin American countries to test our hypotheses. The analysis reveals inconsistencies in the results both by selection of data and methodology suggesting much of the debate regarding ELG, at least for Latin America, is fuelled by data and/or methodology choice, putting into question previous studies.

What a difference a source makes! An analysis of export data

This study examines real export data from two common sources: IMF and UN Commodity Trade Statistics to determine the comparability of these data in level and percentage change form, and if the export-led growth models are robust to the data source. Additionally, the comparability of the data deflated at a disaggregated level data or by a single export unit price index is examined. The results reveal that the data are neither comparable nor in a number of cases, correlated, suggesting that much of the debate regarding export led growth is fuelled by data choice and methodology of deflation.

EXPORT DIVERSIFICATION AND INTRA-INDUSTRY TRADE IN SOUTH AFRICA

This paper uses cumulative export experience functions to explore the structural dynamics of South Africa's exports for the period 1990–2003. It finds a large spread of emerging non-traditional accelerating export products across industry clusters of different factor intensities, steadily increasing their proportion in total exports and her main markets. Shift-share and correlation analyses show that increased intra-industry specialisation and trade within import competing product groups explain the structural change in the direction of export diversity. With respect to quality, as measured by relative unit prices of exports and imports in intra-industry trade with the EU and the US, a relative improvement of export quality is found.

An Empirical Analysis of China's Export Behavior

This paper studies the behavior of China's exports from the mid-1980s through 2001. Extensive quarterly data on values and quantities of major export products have been taken from Chinese custom statistics to form a panel data set. The data are used to estimate export supply price elasticities, including by industry groups. The extensive product level data permits the use of panel estimation techniques in order to increase the power of testing methodology. Aggregate quarterly export unit price indices are also constructed and thereby provide an input to future research on China's trade.

How responsive is Chinese export supply to market signals?

This paper studies the behavior of Chinese exporters from the mid-1980s through 2001. Extensive quarterly data on values and quantities of major export products have been taken from Chinese customs statistics to form a panel data set and aggregate export unit price and volume indices. The data are used to estimate export supply price elasticities, including by industry groups. The overall results indicate an increase in the responsiveness of export supply to market price signals in more recent periods following reforms.

An Empirical Analysis of China's Export Behavior

This paper studies the behavior of China's exports from the mid-1980s through 2001. Extensive quarterly data on values and quantities of major export products have been taken from Chinese customs statistics to form a panel data set. The data are used to estimate export supply price elasticities, including by industry groups. The extensive product level data permits the use of panel estimation techniques in order to increase the power of the testing methodology. Aggregate quarterly export unit price indices are also constructed and thereby provide an input to future research on China's trade.

Recovery of American Foreign Trade

IN SPITE of a marked increase in the value of exports and imports of merchandise since the depth of the depression was reached in 1932, our external commerce at the end of the calendar year 1936 had recovered little more than one-half the 1929 value. Imports have shown a somewhat greater resiliency than have exports, as a comparison of the figures will show. the same degree of recovery from the low figure of 1932, they displayed a marked difference in their approach to the 1929 level. The unit prices of exports in 1936 represented 129 per cent of the 1932 figure and 76 per cent of the 1929 level; import prices in 1936 were 124 per cent of those of 1932 and only 62 per cent of those of 1929. It becomes at once apparent that if import