RCA Analysis With Selected Product: Modified Approach Applied to Indonesian Export

Tampubolon, Jongkers

doi:10.17977/um002v11i22019p143

Cited by 3 publications

(5 citation statements)

References 17 publications

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“…According to Balassa (1965) comparative advantage is defined as the ratio between a particular export product of a country's overall exports to the world and a country's total exports to total world exports [27]. RCA is based on Ricardian trade theory, which holds that trade patterns between countries are governed by a country's relative differences to the world or countries in productivity [28]. According to Balassa (1965), a country should have a comparative advantage for a particular product if the share of that product in its country's exports is greater than that of other trade areas compared [29].…”

Section: Methodsmentioning

confidence: 99%

Comparative advantage of Indonesian mushroom commodities in the green technology era

Suwanan,

Haryono,

Serino

et al. 2024

IOP Conf. Ser.: Earth Environ. Sci.

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Mushroom is a commodity in the agricultural sector that has the potential to be developed in global trade competition. As part of the ASEAN regional cooperation institution, Indonesia can contribute to achieving excellence in mushroom commodities. Developing mushroom cultivation to support green technology innovation also helps achieve food security for future generations. This research aims to analyze and overview the comparative advantages of ASEAN with China related to mushroom commodities in 2018-2022. This research uses descriptive analysis methods and RCA-Revealed Comparative Advantage analysis in calculating the RCA of this mushroom, using HS codes 0709, 0711, and 0712. HS code 0709 represents mushroom commodities based on the sub “Fresh or chilled mushrooms of the genus “Agaricus” and Fresh or chilled edible mushrooms and truffles. The results show that China has a comparative advantage over ASEAN regarding mushroom commodities in 2018-2022. China outperforms in 3 mushroom commodity sectors in HS Codes 071159, 071151, and 071239. In comparison, ASEAN regional institutions have a low and weak level of comparative advantage in each mushroom commodity code. These results indicate that countries that are members of ASEAN pay less attention to mushroom commodities. Therefore, strategic efforts are needed to develop mushroom commodities supporting green technology innovation by prioritizing humidity control to achieve national food security goals.

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Section: Methodsmentioning

confidence: 99%

Comparative advantage of Indonesian mushroom commodities in the green technology era

Suwanan,

Haryono,

Serino

et al. 2024

IOP Conf. Ser.: Earth Environ. Sci.

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“…The crisis caused a decline in Indonesia's total export value, which may have affected the competitiveness of Indonesian pulp exports in China Prasetyo A et al(2018). Second, the implementation of the ASEAN-China Free Trade Agreement in 2010 has led to changes in the competitive landscape, affecting Indonesia's export competitiveness in the Chinese market (Tampubolon 2019). type of pulp with advantages such as low production costs, high opacity and good paper formation .…”

Section: Comparative Advantage Analysismentioning

confidence: 99%

Indonesia’s Pulp Export Performance In the China Market: An Analysis Using Almost Ideal Demand System Approach

Natalia,

Simangunsong,

Manurung

2024

Agro. Bali. Agric. J.

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Indonesia is one of the world's leading pulp producers. Both domestic consumption and global demand are increasing annually. As Indonesia seeks to meet the escalating global demand for pulp raw materials, China is emerging as a major destination for its exports, which underscores the strategic importance of this market. This study aims to evaluate the comparative advantage of Indonesian pulp exports and to identify the price, cross-price and expenditure elasticities of pulp demand in the Chinese market. Using the Revealed Comparative Advantage (RCA) method and the Linear Approximation-Almost Ideal Demand System (LA/AIDS) model, this research analyzes annual time series data covering the period 2003-2022, focusing on the quantity and export value of chemical pulp (HS 470329). The results show that Indonesian pulp has a comparative advantage in the Chinese market, as indicated by Indonesia's RCA index greater than one. However, this comparative advantage is declining over time. At the same time, China's sustained increase in pulp consumption underscores the intensified competition among pulp-exporting countries for market share in China. Using the LA/AIDS model, the estimation results highlight a different dynamic in the Chinese pulp market: Japanese pulp emerges as a complementary product to Indonesian pulp, while Thailand and Brazilian pulp act as substitutes. These findings have valuable strategic implications for Indonesian policymakers and industry stakeholders in managing the complexities of global pulp trade dynamics

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“…This method has been employed by many scholars to identify comparative advantages in food and agricultural trade (including fish and seafood) within the RCEP [69], the ASEAN [59,70,71], and between ASEAN countries and China [72,73], Japan [74], South Korea [75], and other economies of Asia [76][77][78][79]. RCA p ij > 1 denotes a comparative advantage of a country i in trade in a product p with a country j, while RCA p ij < 1 means a comparative disadvantage, respectively.…”

Section: Comparative Advantagementioning

confidence: 99%

“…Despite its wide use in studies of trade flows between countries, in some cases, the utilization of the RCA approach can result in rather rough or even misleading estimations [81]. According to many authors, including Balance et al [82], Coniglio et al [83], Tampubolon [73], and Gnidchenko and Salnikov [84], the comparative advantage measure must express the ratio of actual trade and reflect net trade rather than exports only. Moreover, due to its static nature, the RCA does not account for market volatilities in the long run, which limits its application in studying new free trade areas and multilateral trade agreements in their dynamics.…”

Section: Comparative Advantagementioning

confidence: 99%

“…Due to previously addressed (Section 2.4) possible inaccuracies in the measurement of comparative advantages, the [i;j] pairs, where the RCA advantage matches either the RTA or the LI (RCA > 1 and LI > 0 or RCA > 1 and RTA > 0) are not considered as A type. Moreover, as of Dunmore [112], Balance et al [82], Tampubolon [73], and Leromain and Orefice [81], the RCA index is insufficient for describing the competitive positions of counterparts in bilateral trade, since it allows identifying comparative advantages rather than determining the underlying sources of such advantages. Also, according to Siggel [113], Costinot et al [114], and Hinloopen and van Marrewijk [115], the RCA index fails to reveal the reasons of advantages and does not allow one to differentiate between natural and acquired advantages (which is crucial for any food production industry, including fisheries).…”

Section: Matching Advantages and Potentialsmentioning

confidence: 99%

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Cross-Country Potentials and Advantages in Trade in Fish and Seafood Products in the RCEP Member States

2021

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Fisheries has always played a vital role in supporting livelihoods and ensuring food security and sustainable economic and social development in Southeast Asia. Historically, rural and coastal communities across the region have heavily relied on the fish trade as an indispensable source of income and employment. With the establishment of the Regional Comprehensive Economic Partnership (RCEP) between Association of Southeast Asian Nations (ASEAN) economies and large fish traders like China, Japan, South Korea, Australia, and New Zealand, there is a threat for smaller countries to lose competitive advantages in the regional market. By studying bilateral trade flows between fifteen RCEP members in 2010–2019 and matching indicative untapped trade potentials (ITP method) with revealed comparative (RCA method), relative trade (RTA method), and competitive (Lafay index) advantages across 210 pairs of countries, the authors found substantial misbalances between potential values of country-to-country trade and actual advantages of RCEP economies. To optimize gains from intraregional trade for both smaller and larger RCEP members, this study identified advantageous and disadvantageous trading destinations and product categories for individual countries. The recommendations were then generalized along the four groups of economies based on their level of income, contribution to overall RCEP trade in fish, and the share of fishery products in the national trade turnover. From a practical side, the study adds to the knowledge about the fish trade in Asia by detailing how countries can better utilize individual combinations of advantages. From a methodological side, the approach can be employed widely outside the RCEP to establish a reliable picture of potential gains or losses of a particular country in trade with its counterparts across varied sets of competitive advantages.

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RCA Analysis With Selected Product: Modified Approach Applied to Indonesian Export

Cited by 3 publications

References 17 publications

Comparative advantage of Indonesian mushroom commodities in the green technology era

Comparative advantage of Indonesian mushroom commodities in the green technology era

Indonesia’s Pulp Export Performance In the China Market: An Analysis Using Almost Ideal Demand System Approach

Cross-Country Potentials and Advantages in Trade in Fish and Seafood Products in the RCEP Member States

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