AD ALTA
JOURNAL OF INTERDISCIPLINARY RESEARCH
One way of judging competitiveness is to ask what the trade
record reveals about the country’s performance. How well does a
country export one item, compared with all other goods? We can
first work out the formula for Relative Export (RES) and Import
Share (RIS), an intermediate step towards Relative Export
(REA) and Import Advantage (RIA). The value of the method
becomes more apparent when we compare RES or RIS between
various commodities.
In order to identify whether the V4 countries are more
competitive, we determined specific live-stock commodity as
cattle, chickens, horses, pigs, sheep and turkeys and used the
modified indexes because it was decided as the best procedure
for this investigation.
In the first step, we defined the Relative Export Share as follows:
RES of the V4 country of live animals =
V4 country exports of live animals
World exports of live animals
total exports of V4 country
World total exports
(1)
RES of the V4 country of commodity =
V4 country exports of commodity
World exports of commodity
total exports of V4 country
World total exports
(2)
During the second phase, we determined the Relative Import
Share as follows:
RIS of the V4 country of live animals=
V4 country imports of live animals
World imports of live animals
total imports of V4 country
World total imports
(3)
RIS of the V4 country of commodity =
V4 country imports of commodity
World imports of commodity
total imports of V4 country
World total imports
(4)
With the completion of these steps, we are now ready to proceed
with the Relative Export Advantage which is based on
intermediate comparison of market shares of world trade, which
we defined in this way:
REA of V4 country of live animals =
V4 country export share of live animals
total exports of V4 country excluding live animals
World export share of live animals
World total export excluding live animals
(5)
REA of V4 country of commodity =
V4 country export share of commodities
tí µí±śtal exports of V4 excluding comodities
World export share of commodities
World total export excluding commodities
(6)
Relative export advantage makes clear distinctions between a
specific commodity and all other commodities, and between a
specific country and the rest of the world. The raw indices are
converted to natural logarithms.
The last step described the Relative Import Advantage as
follows:
RIA of V4 country of live animals =
V4 country imports share of live animals
total imports of V4 excluding live animals
World imports share of live animals
World total imports excluding live animals
(7)
RIA of V4 country of commodity =
V4 country imports share of commodity
total imports of V4 excluding commodity
World imports share of commodity
World total imports excluding commodity
(8)
where the raw indices are converted to natural logarithms.
To summarise how well a country’s economic sector, such as
live animals and the commodities, competes with other
economic activities in the international market, both exports and
imports by the country in question are accounted for. We defined
the Revealed Competitiveness as follows:
RC = REA – RIA
where REA refers to the Relative Export Advantage and RIA to
the Relative Import Advantage. To arrive at a final index number
for Revealed Competitiveness, we subtract the Relative Import
Advantage of the sector from its Relative Export Advantage. As
in the Relative Export Advantage index, we use natural
logarithms to ease comparisons. This adjustment is made
because countries have two-way trade in their economic systems.
3 Results
3.1 Relative Export Share of Live Animals and Six Chosen
Commodities
The records reveal that from 2004 to 2013, the relative export
share of live animals from the Czech Republic was 1.64 times
better than the average of all its exports, compared with the
world. Hungary’s relative export share of live animals was 2.74
times better than the average of all its exports, compared with
the world. Poland’s results reveal that the relative export share of
live animals from the country was 2.09 times better than the
average of all its exports, compared to the world. The last
country, Slovakia, in that period showed that its relative export
share of live animals was 1.93 times better than the average of
all its exports, compared with the world.
If we examine the single country results over the periods, we can
confirm that Poland had a better advantage of the V4 share of
exports from 2004 to 2007 and Hungary had the advantage from
2008 to 2013, demonstrated in Table 1 and Figure 1, Slovakia is
the only country with the possibility of expanding its share of
exports, as can be seen from 2008 by the increase.
TABLE 1: Relative Export Share of Live Animals, 2004-2013
2004
2005
2006
2007
2008
CZ
1.49
1.54
1.44
1.47
1.76
HU
2.10
2.25
2.06
1.81
2.46
PL
3.13
3.32
3.42
2.29
1.81
SK
1.11
1.51
1.60
1.24
1.38
2009
2010
2011
2012
2013
CZ
1.48
1.52
1.75
1.97
1.98
HU
2.79
3.19
3.83
3.69
3.27
PL
2.01
1.47
1.24
1.26
0.98
SK
1.87
2.27
2.51
2.75
3.01
Source: author’s own calculation based on (FAOSTAT, 2015),
(International Trade in Goods - Exports 2001-2016, 2015)
.
FIGURE 1: Relative Export Share of Live Animals, 2004-2013
Source: author’s own calculation based on (FAOSTAT, 2015),
(International Trade in Goods - Exports 2001-2016, 2015).
The value of the method becomes more apparent when we
compare relative export shares among various commodities in
our case: cattle, chickens, horses, pigs, sheep and turkeys as
indicated in Figure 2.
We see the highest marked share value of the commodity in the
period from 2004 to 2013. The first commodity is cattle, where
we see the best share in Poland from 2004 to 2007; the next best
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