TRADE COMPETITIVENESS MAP

Transcription

1 TECHNICAL NOTES TRADE COMPETITIVENESS MAP Benchmarking naional and secoral rade performance TRADE PERFORMANCE INDEX Marke Analysis and Research Division of Marke Developmen Inernaional Trade Cenre

2 ITC s Marke Analysis and Research TPI Technical Noes Table of Conens 1. Summary Inroducion Moivaion for developing he Trade Performance Index Conen of he TPI Daa used Descripion of indicaors... 8 G1. - VALUE OF EXPORTS (in housand US$)... 9 G2. - EXPORT GROWTH IN VALUE, p.a. (%) G3. - SHARE IN NATIONAL EXPORTS (%) G4. - SHARE IN NATIONAL IMPORTS (%) G5. - RELATIVE TRADE BALANCE (%) G6. - RELATIVE UNIT VALUE (world average = 1) P1. - VALUE OF NET EXPORTS P2. - PER CAPITA EXPORT P3. - SHARE IN WORLD MARKET (% share of world expors) P4.a - PRODUCT DIVERSIFICATION (N of equivalen producs - EN) P4.b - PRODUCT CONCENTRATION (Spread) P5.a - MARKET DIVERSIFICATION (N of equivalen markes) P5.b - MARKET CONCENRATION (Spread) C1. - RELATIVE CHANGE OF WORLD MARKET SHARE C1.a - COMPETITIVENESS EFFECT, p.a. (%) C1.b - INITIAL GEOGRAPHIC SPECIALISATION, p.a. (%) C1.c - INITIAL PRODUCT SPECIALISATION, p.a. (%) C1.d - ADAPTATION EFFECT, p.a. (%) C2. - MATCHING WITH DYNAMICS OF WORLD DEMAND Appendixes Appendix 1: More on he use of differen dispersion indicaors Appendix 2: Definiion of secors Inernaional Trade Cenre (ITC)

3 ITC s Marke Analysis and Research TPI Technical Noes 1. Summary The Inernaional Trade Cenre (ITC) developed he Trade Performance Index (TPI) wih he aim of assessing and monioring he muli-faceed dimensions of expor performance and compeiiveness by secor and by couny. A presen, he TPI covers around 180 counries and 14 differen expor secors. The index calculaes he level of compeiiveness and diversificaion of a paricular expor secor using comparisons wih oher counries. In paricular, i brings ou gains and losses in world marke shares and she ligh on he facors causing hese changes. Moreover, i moniors he evoluion of expor diversificaion for producs and markes. The TPI is limied by is purely quaniaive approach, alhough i does provide a sysemaic overview of secoral expor performance and comparaive and compeiive advanages. For each counry and each secor, he TPI provides hree ypes of indicaors: a general profile, a counry posiion for he laes available year and changes in expor performance in recen years. Alogeher, he TPI makes use of several quaniaive performance indicaors. For ease of reference, hese indicaors are presened in absolue erms and, in addiion, ranked among he 180 counries covered by he TPI. Moreover, one composie ranking referring o he overall posiion of a counry and secor is calculaed. This composie ranking is based on five crieria, namely he value of ne expors, per capia expors, he world marke share, he diversificaion of producs, and he diversificaion of markes. 2. Inroducion The rade performance of individual counries en o be a good indicaor of economic performance since well performing counries end o record higher raes of GDP growh. The majoriy of developing counries have joined he World Trade Organizaion (WTO) and have aken iniiaives aimed a opening heir economies. Inernaional Trade Cenre (ITC) 1

4 ITC s Marke Analysis and Research TPI Technical Noes Neverheless, he oucome has no always been sysemaically posiive wih expor performance someimes remaining disappoining. I is difficul o esablish an all embracing definiion of successful rade performance. Trade champions conras wih cerain specialised exporers ha suffer from deerioraion in heir erms of rade. For example, some developing counries record high growh raes by specialising in niche markes and concenraing heir expor markes, while oher developing counries record more moderae raes of growh wih a well diversified array of producs and parner counries. In oher cases, successful performance is he resul of a favourable produc or marke peneraion since he beginning. Successful performance can also be gauged in erms of a counry s abiliy o adap is expor profile o changing paerns of world demand. The las approach is he mos dynamic and demand-driven rade policy sance. The Trade Performance Index (TPI hereafer) designed by ITC aims o ackle he complex and mulidimensional naure of rade paerns. This index is compued using he world s larges rade daabase, COMTRADE (of he Unied Naions Saisics Division), covering around 180 counries 1, where more han 95% of world rade in 5,000 producs is repored a he 6-digi level of he Harmonized Sysem (HS). Since COMTRADE capures around 95 % of world rade, he TPI is calculaed no only for counries ha repor heir own rade daa, bu also for over one hundred primarily low-income counries ha do no repor naional rade saisics. Given ha such an amoun of informaion would be overwhelming o he final user, producs are grouped ino 14 secors (see appendix 2). Calculaions are made a he produc level and resuls are presened a he secoral level and for he economy as a whole. For each counry and each secor, he TPI provides a general profile, indicaors on a counry s posiion and indicaors on changes in expor performance in recen years. The res of he paper covers he objecives, mehodology and resuls of he TPI framework. 1 In he case of non-reporing counries, he rade is reconsiued on he basis of parner counry saisics (mirror saisics). This approach does no capure rade among non-reporing counries Inernaional Trade Cenre (ITC) 2

5 ITC s Marke Analysis and Research TPI Technical Noes 3. Moivaion for developing he Trade Performance Index Generally, rade performance is characerised by rough indicaors, such as he level of openness (oal rade in goo and services divided by GDP) or growh of expors over a given period (such as he World Bank s World Developmen Indicaors). Recen research on he relaionship beween rade and growh suggess ha openness alone is no a sufficien crierion for deermining high levels of growh. Oher facors, such as he ype of produc available, he level of marke and economic diversificaion, he posiioning on qualiy ladders, are also significan in explaining growh. In addiion, i is imporan o deermine he reasons for counry differences in expor growh and o deermine he redisribuive process of marke shares among compeiors. Deparing from he rough indicaors referred o above, microeconomic and generally qualiaive indicaors are used o characerise he compeiiveness of naions. In his ligh, he Microeconomic index of compeiiveness (Porer and Chrisensen, 1999), is based on he micro-foundaions of a counry s compeiiveness. Launched in 1998 as par of he Global Compeiiveness Repor, his index is based on a survey of some 4,000 businessmen and governmen officials in 58 counries, including OECD counries 2. Regressing income per capia on his index explains more han 80% of he variance of income in he sample. A quaniaive mehod was developed in order o complemen he qualiaive approach, which may be criicised on he ground of being limied o a small number of developing counries. I appears ha he relaive posiion of a counry or produc on he inernaional marke, and is developmen over ime, is a good indicaor of compeiiveness. Trade saisics capure hese changes. Trade saisics have he advanage of being available for a subsanial number of counries. For hose counries which do no repor rade saisics, heir rade profile can be (parially) compleed by using 2 Indicaors range from he overall infrasrucure qualiy o adminisraive infrasrucure, informaion infrasrucure, capial availabiliy, human resources ec. Inernaional Trade Cenre (ITC) 3

6 ITC s Marke Analysis and Research TPI Technical Noes mirror saisics. Lasly, rade daa is broken down a he indusry and produc levels, which provides a disaggregaed insigh ino rade performances. On his basis, developing counries can be ranked according o heir rade performance, based on various crieria. A ranking can be provided by counry, secor, or a combinaion of differen crieria. I mus be sressed ha he performance of individual counries canno be deermined on he basis of a resriced sample of counries or producs. The derivaion of he relaive expor performance is achieved by including a significan number of counries, ogeher wih a deailed produc breakdown. 4. Conen of he TPI For each counry and each secor, he TPI provides indicaors on a counry s general profile, on a counry s posiion and on he decomposiion of he counry s change in world marke share. Alogeher, he TPI consiss of 22 quaniaive indicaors of rade performance. For ease of reference, hese indicaors are presened in absolue erms and, in addiion, combined o form a ranking among he counries. All his informaion is grouped under hree caegories referring o general profile, curren performance and decomposiion of changes in rade performance, as illusraed in Table 1. Inernaional Trade Cenre (ITC) 4

7 ITC s Marke Analysis and Research TPI Technical Noes Table 1. Groups of indicaors used Curren performance 3 General profile Decomposiion of changes in world marke share (las 5 years) P1. Value of ne expors G1. Value of expors C1. Relaive change of world marke share P2. Per capia expors G2. Trend growh of expors (las 5 years) decomposed ino: P3. Share in world marke G3. Share in naional expors P4.a Produc diversificaion G4. Share in naional P4.b Produc concenraion impors (C1a) Compeiiveness effec (C1b) Iniial geographic specialisaion P5.a Marke diversificaion P5.b Marke concenraion G5. Growh in per capia expors (las 5 years) G6. Level in relaive uni values (C1c) Iniial produc specialisaion (C1d) Adapaion effec C2. Maching wih dynamics of world demand 5. Daa used The raw rade daa used o calculae he indicaors are defined a he 6-digi level of he Harmonized Sysem, 1996 ediion, which includes more han 5'000 produc iems. The daa are exraced from COMTRADE (hp://comrade.un.org), he Unied Naions Commodiy Trade Saisics Daabase, mainained by he Saisics Division of he U.N. Around 100 counries have repored heir rade daa sysemaically over he las five years in he 1996 ediion of he HS. For he oher counries (around 90), we are using mirror esimaes, which are derived from parner counries saisics. Since COMTRADE capures around 95 % of world rade, mirror esimaes usually give fairly reliable resuls. See Box 1 for a descripion of problems encounered using rade daa. 3 Indicaors used for he compuaion of he composie index. Inernaional Trade Cenre (ITC) 5

8 ITC s Marke Analysis and Research TPI Technical Noes In order o obain more robus rankings of rade performance, for each secor we have only considered counries whose expors are superior o US$ 1 million for each year of a five-year period under review, and whose oal expors for he same period are superior o US$ 25 million. Box 1: Foreign Trade Saisics: wha users should ake ino consideraion Foreign rade saisics provide a differeniaed picure of rade flows among counries. They are comprehensive in erms of produc coverage (more han 5,000 producs under he Harmonized Sysem), geographical coverage (over 100 counries covering 95 per cen of world rade) and ime series (daa under he Harmonized Sysem are available for he las decade). Moreover, hey are readily available a moderae coss. This makes hem an aracive source for marke research and he assessmen of rade performance. Agains his background, ITC has developed a number of ools for inernaional markeing and rade promoion, based on rade saisics. The Trade Performance Index and Trade Maps are cases in poin. All of hese ools srive o presen rade saisics in an analyical and user friendly forma. Nowihsanding he araciveness of his comprehensive source of informaion, users should facor in he following weak poins of foreign rade saisics. i) Trade daa are never complee. Smuggling and non-reporing represen a serious problem in a number of counries. In addiion, rade saisics as any source of informaion are no free of misakes and omissions. ii) Mos counries include impors for re-expors and re-expors in heir rade saisics. A low income counry may be an exporer of airplanes simply because is naional airline has sold second hand planes. iii) According o inernaional convenions for reporing rade saisics, he expor value refers o he oal or conrac value, which may, of course, be very differen from local value added for many processing aciviies, for insance, he local value added remains below 20 per cen of he expor value. Inernaional Trade Cenre (ITC) 6

9 ITC s Marke Analysis and Research TPI Technical Noes iv) Deailed rade saisics are available only for merchandise rade and no for services, alhough he laer may accoun for a sizeable share of naional expors. v) Even a he lowes level of disaggregaion, produc groups in he rade nomenclaures do no necessarily reflec rade names and ofen conain a wide spread of differen producs. Moreover, he produc nomenclaure is someimes misleading. The labels of aggregaed produc groups are ofen very general and provide a imes only limied guidance on he leading iems wihin he group of producs concerned. vi) Exchange raes flucuaions are no always properly recorded in inernaional rade saisics. Values are normally aggregaed over he period of one year in local currency and convered ino US dollars. vii) For counries ha do no repor rade daa o he Unied Naions, ITC uses parner counry daa, an approach referred o as mirror saisics. Mirror saisics are a second bes soluion (beer han having no daa a all). A he same ime, hey have a number of shorcomings when compared o he firs bes soluion of naionally repored daa. Firs and foremos, hey do no cover rade wih oher non reporing counries. As a resul, mirror saisics hardly cover Souh rade. For an assessmen of inra African rade, for insance, mirror saisics are no a suiable source of informaion. Second, here is he problem of ranshipmens, which may hide he acual source of supply. Third, mirror saisics inver he reporing sandar by valuing expors in if erms (i.e. including ranspor cos and insurance) and impors in fob erms (excluding hese iems). In view of he above shorcomings, rade saisics should never be he sole source of insigh bu need o be complemened by oher sources and in paricular cross checked by produc specialiss and indusry insiders. Overall, ITC's experience suggess ha rade saisics represen a very useful source of informaion and a valid poin of deparure for sraegic marke research, if analysed wih a healhy mix of scepicism and pragmaism vis-à-vis heir srengh and shorcomings. Inernaional Trade Cenre (ITC) 7

10 ITC s Marke Analysis and Research TPI Technical Noes 6. Descripion of indicaors This secion examines he raionale and he calculaion of each indicaor enering in he TPI. General profile indicaors, posiion-relaed indicaors (Curren Performance) and change-relaed indicaors are surveyed respecively. All indicaors are calculaed for each of he 14 secors a he produc level. Original daa used in he compuaion is a he 6-digi level of he HS nomenclaure (1996 ediion), corresponding o more han 5,000 producs as a whole. The composie index (CI) 4 is based on a simple average of he five rankings of curren performance indicaors (P1 o P5). This index reflecs he posiion of a counry in a given secor for a given year, in erms of rade performance. Changes over ime of his posiion reflec improvemens or deerioraion in rade performance of he counry under analysis. 4 In he previous ediions of he TPI, his index was referred as he "Curren Index (P)". Inernaional Trade Cenre (ITC) 8

11 ITC s Marke Analysis and Research TPI Technical Noes G1. - VALUE OF EXPORTS (in housand US$) Wha does i ell us? This index shows he value of counry s secor s oal expors for he chosen year (in housan of US$), indicaing he imporance of he secor. Expors are given in FOB erms (free on board) if he counry is a direc reporer o he Unied Naions COMTRADE daabase, oherwise in CIF erms (cos, insurance, freigh), as mirror saisics (based on he parners declaraions of impors) are used. $18,000,000 $15,000,000 $12,000,000 $9,000,000 $6,000,000 $16,793,596 Expors (value in housan US$) $10,749,814 $9,992,899 Definiion: Sum of seleced secor s expors in he chosen year. Range of values: $3,000,000 $0 China Russian Fed. $71,082 $21,133 Ialy Nigeria Venezuela Takes value beween 0 and +, wih higher values indicaing greaer imporance of he secor under review. Example: The above figure depics he Wood and aricles of wood secor s expors (value in housand US$) for seleced economies in he chosen year (). Inernaional Trade Cenre (ITC) 9

12 ITC s Marke Analysis and Research TPI Technical Noes G1. TECHNICAL NOTES Mahemaical definiion: X where d is he counry under sudy, s refers o a specific secor and X are he expor values. Daa sources: Trade daa can be obained from he ITC Trade Map and he Unied Naions Commodiy Trade daabase (COMTRADE). Counry Expors (value in housan US$) China $16,793,596 Russian Fed. $10,749,814 Ialy $9,992,899 Nigeria $71,082 Venezuela $21,133 Sample calculaion: The able above presens oal expors daa for seleced economies for he secor under review. The rade daa is from ITC Trade Map. All of he daa is in compaible unis (curren US dollars). Inernaional Trade Cenre (ITC) 10

13 ITC s Marke Analysis and Research TPI Technical Noes G2. - EXPORT GROWTH IN VALUE, p.a. (%) Wha does i ell us? 25% 21% The expor growh in value shows he developmen of a secor s expors from ime o ime (las five years). A posiive value shows ha he expors (in value) have increased. Definiion: Expors Growh in value 20% 16% 15% 12% 10% 6% The weighed rend (compound growh raes) measures, for each counry and each secor, he annual percenage growh of expors over he mos recen 5-year period. Range of values: 0% -5% I akes values beween - and + (per cen), wih posiive values indicaing posiive rend. 6% 5% -5% -10% Canada China France Mexico Senegal Slovakia Example: The above figure depics he Wood and aricles of wood secor s expor growh in value for seleced economies in a given 5-year period (, ). G2. TECHNICAL NOTES Inernaional Trade Cenre (ITC) 11

14 ITC s Marke Analysis and Research TPI Technical Noes Mahemaical definiion: Counry 1 0 X GVX 100 X 0 1 where and are respecively he las and he firs years considered, d is he counry being sudied, s is he selecing secor, and X are he expors. Canada China France Mexico Senegal Slovakia Expor Value 0 $29,854,934 $13,879,005 $12,456,154 $1,686,856 $18,687 $2,237,659 Expor Value $28,362,187 $16,793,596 $13,203,523 $1,788,067 $20,929 $2,595,684 Expors Growh in value -5% 21% 6% 6% 12% 16% Sample calculaion: Daa sources: Trade daa can be obained from he ITC Trade Map and he Unied Naions Commodiy Trade daabase (COMTRADE). The able above presens a secor s expors in value daa for seleced economies in he period under review. The rade daa is from ITC Trade Map. All of he daa is in compaible unis (curren US dollars). The value of he expors growh is he resul of he raio of he secor s expors in he las year of he period under review o he expors of he firs year considered, normalised for a given facor, and muliplied by 100 o aler he expression in percenage erms. Inernaional Trade Cenre (ITC) 12

15 ITC s Marke Analysis and Research TPI Technical Noes G3. - SHARE IN NATIONAL EXPORTS (%) Wha does i ell us? 3.00% This indicaor refers o he share of a secor s expors in relaion o oal counry expors; hence i shows he imporance of he secor under review in naional expors. Definiion: The percenage raio beween oal secor s expors o oal counry s expors. 2.50% 2.00% 1.50% 1.00% 1.18% 2.50% SHARE IN NATIONAL EXPORTS 1.92% Range of values: Takes value beween 0 and 100 per cen, wih higher values indicaing greaer imporance of he secor under review in he seleced counry s expor porfolio. 0.50% 0.00% China Russian Fed. 0.09% 0.03% Ialy Nigeria Venezuela Example: The above figure depics he Wood and aricles of wood secor s share in naional expors for seleced economies in he chosen year (). Inernaional Trade Cenre (ITC) 13

16 ITC s Marke Analysis and Research TPI Technical Noes G3. TECHNICAL NOTES Mahemaical definiion: SHNX 100 where d is he counry under sudy, s is he seleced secor, and X are he expors. Daa sources: Trade daa can be obained from he ITC Trade Map and he Unied Naions Commodiy Trade daabase (COMTRADE). X X d. Counry Secor s Expors ($US.000) Toal Expors ($US.000) Share in Naional Expors China $16,793,596 $1,426,967, % Russian Fed. $10,749,814 $429,662, % Ialy $9,992,899 $520,679, % Nigeria $71,082 $80,710, % Venezuela $21,133 $83,191, % Sample calculaion: The able above presens a secor s expors and oal counry s expors daa for seleced economies. The rade daa is from ITC Trade Map. All of he daa is in compaible unis (curren US dollars). The value of he share in naional expors is he resul of he raio of a secor s expors o oal expors, muliplied by 100 o aler he expression in percenage erms. Inernaional Trade Cenre (ITC) 14

17 ITC s Marke Analysis and Research TPI Technical Noes G4. - SHARE IN NATIONAL IMPORTS (%) Wha does i ell us? This index indicaes he share of a secor s impors in relaion o oal counry impors; hence i shows he imporance of his secor in naional impors. Definiion: 5% 4% 3% Share in Naional Impors The percenage raio beween oal secor s impors o oal counry s impors. Range of values: Takes value beween 0 and 100 per cen, wih higher values indicaing greaer imporance of he secor under review on he seleced counry s rade balance. 2% 1% 0% Poland Russian Fed. Ialy Nigeria Angola Esonia Example: The above figure depics he Wood and aricles of wood secor s share in naional impors for seleced economies in he chosen year (). Inernaional Trade Cenre (ITC) 15

18 ITC s Marke Analysis and Research TPI Technical Noes G4. TECHNICAL NOTES Mahemaical definiion: SHNM 100 M M where d is he counry under sudy, s is he seleced secor, and M are he impors. Daa sources: Trade daa can be obained from he ITC Trade Map and he Unied Naions Commodiy Trade daabase (COMTRADE). d. Counry Impors ($US.000) Toal Impors ($US.000) Share in Naional Impors Poland $6,314,355 $210,478,512 3% Russian Fed. $5,341,025 $267,051,248 2% Ialy $16,618,865 $553,962,176 3% Nigeria $563,872 $28,193,596 2% Angola $202,969 $20,296,878 1% Esonia $693,324 $17,333,096 4% Sample calculaion: The able above presens secor s impors and oal counry s impors daa for seleced economies. The rade daa is from ITC Trade Map. All of he daa is in compaible unis (curren US dollars). The value of he share in naional impors is he resul of he raio of secor s impors o oal impors, muliplied by 100 o aler he expression in percenage erms. Inernaional Trade Cenre (ITC) 16

19 ITC s Marke Analysis and Research TPI Technical Noes G5. - RELATIVE TRADE BALANCE (%) Wha does i ell us? A firs advanage is ha he indicaor eliminaes re-expors ha can inroduce a srong bias for some counries. A second advanage is ha he indicaor akes ino accoun he globalisaion of he producion processes: since expored goo incorporae o a large exen impored inermediae producs ha are ofen from he same secor (e.g. elecronic pars and assembled compuers), ne expors inroduce a simple correcive measure for dealing wih he specialisaion of counries on various producion sages. Relaive rade balance (%) Kazakhsan -32% Mexico -23% 13% Definiion: I is he raio beween he rade balance (expors minus impors) and he oal rade (expors plus impors). This reduces bias agains large indusries, which end o have eiher high deficis or surpluses. Esonia Ialy 16% -40% -20% Russian Fed. Poland -3% I shows wheher a counry is a ne exporer (where naional producion ouweighs naional consumpion) or a ne imporer (where consumpion ouweighs producion). 35% 0% 20% 40% Relaive rade balance Example: The above figure depics he Wood and aricles of wood secor s relaive rade balance for seleced economies in he curren period. Range of values: I akes values beween -100 and +100 (per cen), wih posiive values indicaing ha he counry is a ne exporer, whereas negaive values indicae ha he counry is a ne imporer. Inernaional Trade Cenre (ITC) 17

20 ITC s Marke Analysis and Research TPI Technical Noes G5. TECHNICAL NOTES Mahemaical definiion: RTB 100 X X di M M where is he curren year, d is he counry under sudy, s is he seleced secor, X are he expors, and M are he impors. Daa sources: Trade daa can be obained from he ITC Trade Map and he Unied Naions Commodiy Trade daabase (COMTRADE). Counry Expor value in period Impor value in period Relaive rade balance Poland $1,722,868 $1,843,469-3% Russian Fed. $6,794,671 $4,959,614 16% Ialy $2,827,102 $1,356,322 35% Esonia $657, ,590$ 13% Mexico $677,213 $1,083,541-23% Kazakhsan $228,561 $441,122-32% Sample calculaion: The value of he relaive rade balance is he resul of he raio of he difference of a secor s ne expors beween he years in exam, o he balance value of he firs year considered, muliplying he whole by 100 o pu he expression in percenage erms. Inernaional Trade Cenre (ITC) 18

21 ITC s Marke Analysis and Research TPI Technical Noes G6. - RELATIVE UNIT VALUE (world average = 1) Wha does i ell us? Relaive uni value (world average = 1) This index shows he sandard of qualiy reached by counry expors of he seleced secor. Tradiionally, he comparison of uni values for homogeneous producs gives an indicaion of exporers relaive prices. However, producs are differeniaed by qualiy, which is ofen refleced by differences in price. 2.5 Definiion: 1.5 Uni value (value divided by quaniy) of a counry s expors relaive o he world uni value in a seleced secor Range of values: The reference poin or average relaive uni value is 1 (he uni value in he argeed counry equals he uni value in he world marke). If he RUV is below (above) 1, hen he counry s expors qualiy is lower (higher) han he world average uni qualiy (he counry expors is produc a a lower higher- price han he world average). Srenghs-limiaions: Prices are considered as an indirec indicaor of he qualiy of differeniaed producs. However, since prices are no available for individual producs, or even for indusries, uni values (values divided by quaniies) are aken as proxies for prices. Higher uni values are considered as reflecing a higher qualiy, oher hings being equal, and no as an indicaion of poor price compeiiveness. 0 Example: The above figure depics he Fresh Food secor s relaive unie value for seleced economies in he chosen year ( ). Inernaional Trade Cenre (ITC) 19

22 ITC s Marke Analysis and Research TPI Technical Noes G6. TECHNICAL NOTES Mahemaical definiion: Where and is a sample of HS-6 posiions relaed o he secor (s) afer removing he ouliers (HS-6 in erms of uni value, five-year rend). Daa sources: Counry Relaive uni value (world average = 1) Algeria Angola Ausralia Ausria Bangladesh Brazil Germany Sample calculaion: Trade daa can be obained from he ITC Trade Map and he Unied Naions Commodiy Trade daabase (COMTRADE). The able above presens relaive unie value s daa for seleced economies in he chosen year (). Inernaional Trade Cenre (ITC) 20

23 ITC s Marke Analysis and Research TPI Technical Noes P1. - VALUE OF NET EXPORTS Wha does i ell us? The value of ne expor is he balance of rade for a specific secor. A counry's ne expor is a reliable indicaor of is posiion on he world marke. A posiive value shows ha he counry expors more han i impors (i has a surplus). Insead, a defici occurs when a counry impors more han i expors. Venezuela China -$1,459 $49,078 Definiion: Russian Fed. -$2,639 The algebraic sum of expors less impors. Nigeria -$1,240 Range of values: Ialy $6,957 Takes values beween - and +. Srenghs-limiaions Ne expors eliminae re-expors, which would oherwise inroduce a bias ino he raw daa. Secondly, he index akes ino accoun he inernaional division of producion processes, since a large par of impored inermediae producs found wihin expors usually belong o he same secor (e.g. elecronic pars and assembled compuers). Hence, ne expors provide a very simple bu reliable correcion for dealing wih he globalisaion of producion processes and he induced verical specialisaion of counries a various sages of producion. -$20,000 $0 $20,000 $40,000 $60,000 Millions Example: The above figure depics he value of ne expors in he exile secor for seleced economies for he chosen year (). Subsanial surplus is observed in China. Inernaional Trade Cenre (ITC) 21

24 ITC s Marke Analysis and Research TPI Technical Noes P1. - VALUE OF NET EXPORTS TECHNICAL NOTES Mahemaical definiion: TB X M where d is he counry under sudy, s refers o a specific secor, X are he expors and M he impors. Daa sources: Trade daa can be obained from he ITC Trade Map and he Unied Naions Commodiy Trade daabase (COMTRADE). Counry Ialy Expors (value, $US) $16,091,507,1 99 Impors (value, $US) Ne Expors (value, $US) $9,134,819,234 $6,956,687,965 Nigeria $45,059,781 $1,285,346,206 -$1,240,286,425 Russian Fed. China $317,685,580 $2,956,546,764 -$2,638,861,184 $65,366,583,4 59 $16,288,626,71 6 $49,077,956,74 3 Venezuela $11,218,703 $1,470,439,298 -$1,459,220,595 Sample calculaion: The able above presens he exile secor s expors and impors daa for seleced economies. The rade daa is from ITC Trade Map. All of he daa is in compaible unis (curren US dollars). The value of he ne expors is simply obained subracing impors from expors. Inernaional Trade Cenre (ITC) 22

25 ITC s Marke Analysis and Research TPI Technical Noes P2. - PER CAPITA EXPORT Wha does i ell us? The value of per capia expors indicaes he level of ouward looking of a counry and he exen o which a counry s populaion produces for he world marke. $ $ $ Per Capia Expors Definiion: $ The raio of expors o inhabians. Range of values: $80.00 $75.80 Takes values beween 0 and +. Srenghs-limiaions: This indicaor, being an average, does no consider he disribuion effec on populaion. $40.00 $0.00 $12.70 $0.50 Example: The above figure depics he value of per capia expor in he exile secor for seleced economies for he chosen year (). $0.80 China Ialy Nigeria Russian Fed. Venezuela Inernaional Trade Cenre (ITC) 23

26 ITC s Marke Analysis and Research TPI Technical Noes P2. - PER CAPITA EXPORT TECHNICAL NOTES Mahemaical definiion: Xcap X Pop where d is he counry under sudy, s refers o a specific secor, X are he expors and Pop he oal populaion for he period. Daa sources: d Trade daa can be obained from he ITC Trade Map and he Unied Naions Commodiy Trade daabase (COMTRADE). Populaion daa can be obained from naional saisical offices on populaion densiy and urbanizaion and from he Unied Naions Saisic Division, demographic and social secion. d Counry Expors (value $US) Populaion Per Capia Expors China $16,793,596,000 1,322,330,394 $12.70 Ialy $9,992,899,000 59,837,719 $ Nigeria $71,082, ,164,000 $0.50 Russian Fed. $10,749,814, ,818,127 $75.80 Venezuela $21,133,000 26,416,250 $0.80 Sample calculaion: The able above presens he secor s expors and counry s populaion daa for seleced economies. The rade daa is from ITC Trade Map, he populaion daa is from he Unied Naions Saisic Division, demographic and social secion. The value of per capia expors is he resul of he raio of he secor s expors o populaion. Inernaional Trade Cenre (ITC) 24

27 ITC s Marke Analysis and Research TPI Technical Noes P3. - SHARE IN WORLD MARKET (% share of world expors) Wha does i ell us? The world marke share ells us how imporan a paricular counry is in erms of he global expor profile for a specific secor. Share in World Markes Definiion: The raio of he seleced counry s expors o oal world s expors (expressed in percenage) % Ialy Nigeria Russian Fed. Range of values: I akes values beween 0 and 100 per cen, wih higher values indicaing greaer imporance of seleced counry on he world marke. Srenghs-limiaions: 0.01% 5.15% 3.30% 0.02% 3.06% China Venezuela RoW This indicaor, being a saic measure, shows a picure of he siuaion bu does no explain he source of any changes occurred on ime. Example: The above figure depics he share in he world marke for he Wood and aricles of wood secor for seleced economies for he chosen year (). Noe: RoW san for Res of he World. Inernaional Trade Cenre (ITC) 25

28 ITC s Marke Analysis and Research TPI Technical Noes P3. - SHARE IN WORLD MARKET - TECHNICAL NOTES Mahemaical definiion: SHWX X X ws 100 where d is he counry under sudy, s is he secor under review, w is he se of all exporing counries and X are he expors. Source Daa: Trade daa can be obained from he ITC Trade Map and he Unied Naions Commodiy Trade daabase (COMTRADE). Counry Expors Share in World Marke (value $US) Ialy $9,992, % Nigeria $71, % Russian Fed. $10,749, % China $16,793, % Venezuela $21, % RoW $288,460, % World $326,089,243 1 Sample calculaion: The able above shows secor s expors daa for seleced economies and world s expors for he secor under review. The rade daa is from ITC Trade Map. The value of he share in world marke is he resul of he raio of one counry s secor expors o world expors. Inernaional Trade Cenre (ITC) 26

29 ITC s Marke Analysis and Research TPI Technical Noes P4.a - PRODUCT DIVERSIFICATION (N of equivalen producs) Wha does i ell us? The equivalen number (EN) is a heoreical value which represens he number of markes of idenical size ha would lead o he degree of expor concenraion exacly equal o he observed one. Calculaing produc differeniaion by means of he EN disinguishes for each counry he equivalen number of expored goo of equal imporance (eiher wihin each secor or in he whole naional economy) leading o he same concenraion of expors. Definiion: The inverse of he Herfindal Index. Range of values: Takes values beween 0 and +. The larger he index value, he greaer he diversificaion of expors, and consequenly he beer he ranking (he increase in rank is a funcion of he increase in he level of diversificaion). Rep. of Korea Philippines Pakisan Ireland Egyp Ecuador Croaia Colombia Rank diversificaion Srenghs-limiaions: Produc diversificaion is a good indicaor of producion srucures and indusry s developmen level. Diversificaion limis he dependence on a small number of producs and hence reduces a counry s vulnerabiliy o indusry-specific exernal shocks. Unforunaely, because his indicaor is no highly sensiive o aciviies of relaively weak imporance, i is a measuremen ha is suied o secoral sudies. Example: The above figure depics produc diversificaion s rank, combined wih produc concenraion s rank for he IT & Consumer elecronics secor for seleced economies for he chosen year (). Inernaional Trade Cenre (ITC) 27

30 ITC s Marke Analysis and Research TPI Technical Noes P4.a - PRODUCT DIVERSIFICATION TECHNICAL NOTES Mahemaical definiion: NDPX 1 HIP where HIP is he Herfindal Index ha i is calculaed as follows: wih HIP np s p 1 X X dp, s X, he expor of produc p by counry d for a given year ; dp s X counry d expors of all producs belonging o he secor s; X he share of produc p in oal expors of counry d in secor s. dp X 2 Counry Produc diversificaion (N.E.) Rank diversificaion Colombia Croaia Ecuador 5 68 Egyp 9 30 Ireland 5 65 Pakisan 2 10 Philippines 4 74 Rep. of Korea 5 71 Sample calculaion: The able above shows produc s diversificaion and concenraion daa/rank for seleced economies in he chosen year. Daa sources: Trade daa can be obained from he ITC Trade Map and he Unied Naions Commodiy Trade daabase (COMTRADE). Inernaional Trade Cenre (ITC) 28

31 ITC s Marke Analysis and Research TPI Technical Noes P4.b - PRODUCT CONCENTRATION (Spread) Wha does i ell us? The spread index complemens he equivalen number. The spread index for producs calculaes for each counry he disribuion of expor producs and compares i o he average expor value. Definiion: The inverse of he sandard deviaion of one counry s produc expors divided by he number of producs, imes he average value of expors for individual producs Range of values: Takes value beween 0 and +. The greaer he disribuion (i.e. spread) of expors from a counry as compared o he average, he higher he value of he index. Srenghs-limiaions: If all counries expor all producs, his indicaor (or he equivalen number) would be sufficien. Since his is no he case, he combinaion of he wo indicaors is useful (see Appendix 1). Rep. of Korea Philippines Pakisan Ireland Egyp Ecuador Croaia Colombia Example: The above figure depics produc concenraion s rank, combined wih produc diversificaion s rank for he IT & Consumer elecronics secor for seleced economies in he chosen year (). The discrepancy can be easily seen (someimes very obviously) beween hese wo measures. For his reason, i could be useful o calculae he combinaion of hese indicaors (see appendix 1) Rank concenraion Rank diversificaion Inernaional Trade Cenre (ITC) 29

32 ITC s Marke Analysis and Research TPI Technical Noes P4.b PRODUCT CONCENTRATION TECHNICAL NOTES Mahemaical definiion: Wih: SDPX 1 Nps p 1 X dp, s Nps X X 2 X dp, s counry d expors of produc p o he markes in a given year; X he average value of counry d expors for he p producs belonging o he secor s; X dp s X, he deviaion o he average of produc p in he secor s for counry d; p 1 nps X dp s X SDPX 2, he sandard deviaion; he weighed spread and Nps he number of produc lines wihin he secor s. Counry Rank concenraion Rank diversificaion Colombia Croaia Ecuador Egyp Ireland Pakisan Philippines Rep. of Korea Sample calculaion: The able above shows marke s concenraion and diversificaion ranks for he IT & Consumer elecronics secor for seleced economies in he chosen year (). Daa sources: Trade daa can be obained from he ITC Trade Map and he Unied Naions Commodiy Trade daabase (COMTRADE). Inernaional Trade Cenre (ITC) 30

33 ITC s Marke Analysis and Research TPI Technical Noes P5.a - MARKET DIVERSIFICATION (N of equivalen markes) Wha does i ell us? The equivalen number shows he degree of marke diversificaion: diversifying parner counries reduces a counry s dependence on a small number of expor markes and hence he vulnerabiliy o shocks wihin desinaion counries. Definiion: The inverse of he Herfindal Index. Range of values: Takes values beween 0 and +. The bigger he index value, he greaer he diversificaion of markes, and consequenly, he beer he ranking (he increase in rank is a funcion of he increase in he level of diversificaion of markes). Turkey Spain Singapore Morocco Lavia India Ehiopia Rank diversificaion Example: The above figure depics marke diversificaion s rank for he Processed food secor for seleced economies in he chosen year (). Inernaional Trade Cenre (ITC) 31

34 ITC s Marke Analysis and Research TPI Technical Noes P5.a - MARKET DIVERSIFICATION TECHNICAL NOTES Mahemaical definiion: NDMX 1 HIM where HIM is he Herfindal Index ha i is calculaed as follows: wih HIM nm s m 1 X X dm, s X dm, s he expor of all producs belonging o he secor s by counry d o he marke m, for a given year ; X counry d expors of all producs belonging o he secor s; X, he share of marke m in oal expors of counry d in secor s. dm s X 2 Counry Marke diversificaion (N.E.) Rank diversificaion Ehiopia India 24 3 Lavia 6 90 Morocco 8 61 Singapore Spain Turkey 18 6 Sample calculaion: The able above shows marke s diversificaion daa and rank for he Processed food secor for seleced economies in he chosen year (). Daa sources: Trade daa can be obained from he ITC Trade Map and he Unied Naions Commodiy Trade daabase (COMTRADE). Inernaional Trade Cenre (ITC) 32

35 ITC s Marke Analysis and Research TPI Technical Noes P5.b - MARKET CONCENRATION (Spread) Wha does i ell us? The spread index for markes compares for each counry, he share of is expors direced o differen parner counries wih he average expor value. Definiion: The inverse of he sandard deviaion of one counry s marke expors divided by he number of markes, imes he average value of expors for individual markes. Range of values: Takes value beween 0 and + and he greaer he dispersion of expors from a counry (i.e. he greaer he spread) as compared o he average, he higher he value of he index. Concerning posiions, he ranking of he 180 counries is a funcion of he degree of diffusion of expored producs (of a counry s expors o parner counries). The smaller he index, he more expored producs are evenly disribued (amongs parner counries) and he beer he ranking. Turkey Spain Singapore Morocco Lavia India Ehiopia Example: The above figure depics marke concenraion s rank, combined wih marke diversificaion s rank for he Processed Food secor for seleced economies in he chosen year (). The discrepancy can be easily seen (someimes very obviously) beween hese wo measures. For his reason, i could be useful o calculae he combinaion of hese indicaors (see appendix 1). 58 Rank concenraion Rank diversificaion Inernaional Trade Cenre (ITC) 33

36 ITC s Marke Analysis and Research TPI Technical Noes P5.b - MARKET CONCENRATION TECHNICAL NOTES Mahemaical definiion: Wih: SDMX 1 nms m 1 X s dm, s nm X X 2 X dm, s counry d expors of all producs belonging o he secor s o he marke m in a given year; X he average value of counry d expors for he m markes belonging o he secor s; X mp s X, he deviaion o he average of marke m in he secor s for counry d; m 1 nm s X dm s X SDMX 2, he sandard deviaion; he weighed spread and Nms he number of markes desinaions wihin he secor s. Counry Rank concenraion Rank diversificaion Ehiopia India 2 3 Lavia Morocco Singapore Spain Turkey 10 6 Sample calculaion: The able above shows marke s concenraion and diversificaion ranks for he Processed food secor for seleced economies in he chosen year (). Daa sources: Trade daa can be obained from he ITC Trade Map and he Unied Naions Commodiy Trade daabase (COMTRADE). Inernaional Trade Cenre (ITC) 34

37 ITC s Marke Analysis and Research TPI Technical Noes C1. - RELATIVE CHANGE OF WORLD MARKET SHARE Wha does i ell us? This index shows he percenage change of a counry s expors in he world marke for he seleced secor beween ime 0 and ime. I is a reliable indicaor of change in global performance for he secor under review. If i is posiive, counry i has increased is world marke share. 0.70% 0.60% 0.50% 0.40% 0.58% Relaive change of world marke share Definiion: 0.30% Percenage variaion in he world marke share for a specific secor s expors beween ime 0 and ime (in his case five years). Range of values: 0.20% 0.10% 0.00% -0.01% 0.15% -0.04% -0.06% 0.06% 0.05% I akes values beween - and + (per cen), wih posiive values indicaing increasing imporance of he seleced counry secor on he world marke % Srenghs-limiaions: The change in a counry s world marke share can be decomposed and expressed as he sum of he following effecs: (a) compeiiveness effec; srucural effec, which in urn can be decomposed ino (b) iniial geographic specialisaion and (c) iniial produc specialisaion; and (d) adapaion effec. Example: The above figure depics relaive change of world marke share for he Mineral secor for seleced economies in he chosen year (). Inernaional Trade Cenre (ITC) 35

38 ITC s Marke Analysis and Research TPI Technical Noes C1. - TECHNICAL NOTES Mahemaical definiion: X X ws X X 0 0 ws j X X js X X js ws X X 0 0 js X X where is he curren year, 0 is he firs year considered, d is he counry under sudy, s is he seleced secor, j is he se of impor markes and X are he expors ( X are world expors for secor s). X X X X X X X X js js ws 0 0 js 0 js 0 ws ws is he counry s marke share on impor markes for ; is he share of impor markes in world impors in ; is he counry s iniial marke share in impor markes; is he iniial share of impor markes in world impors. 0 js 0 ws Counry Relaive change of world marke share Greece -0.01% Liberia 0.58% Mongolia 0.15% Neherlan -0.04% Paraguay -0.06% Qaar 0.06% Sudan 0.05% Sample calculaion: The able above shows relaive change of world marke share s daa for he Mineral secor for seleced economies in he chosen year (). Daa sources: Trade daa can be obained from he ITC Trade Map and he Unied Naions Commodiy Trade daabase (COMTRADE). Inernaional Trade Cenre (ITC) 36

39 ITC s Marke Analysis and Research TPI Technical Noes C1.a - COMPETITIVENESS EFFECT, p.a. (%) Wha does i ell us? This index represens a quoa of he relaive change of world marke share. The compeiiveness effec in fac shows he percenage change in compeiiveness of a counry s expors in he world marke for he seleced secor in he period under review. I correspon o hypoheical gains or losses of a counry s aggregae marke share ha would occur if changes were only due o variaions in he counry s marke share in impor markes, regardless of he srucure of he counry s expors. Sudan Qaar Paraguay Neherla Mongolia rank Definiion: Change in he exporing counry's share in desinaion markes' impors imes he iniial share of parner counries' impors in world rade (weighed average of he variaion in he counry's posiion on elemenary markes 5 ) Range of values: I akes values beween - and + (per cen), wih posiive values indicaing a gain in marke due o increased compeiiveness of a seleced counry secor on he world marke. Liberia Greece Example: The above figure depics compeiiveness effec (by ranking) for he Mineral secor for seleced economies in he chosen year () An elemenary or impor marke is defined as he desinaion counry j for a specific secor s. Inernaional Trade Cenre (ITC) 37

40 ITC s Marke Analysis and Research TPI Technical Noes C1.a - TECHNICAL NOTES Mahemaical definiion: 0 X djs X djs j X X 0 js js X js0 X 0 ws where is he curren year, 0 is he firs year considered, d is he counry under sudy, j is he parner counry, s is he seleced secor, and X are he expors, ( are world expors for secor s). X djs X js 0 X djs X js0 X js0 0 X ws Compeiiveness effec Rank Greece Liberia Mongolia Neherlan Paraguay Qaar Sudan 0.00% -0.02% 0.02% -0.04% -0.02% 0.02% -0.08% Sample calculaion: is he variaion in he counry s marke share in impor markes; Counry The able above presens compeiiveness effec s daa and rank for he Mineral secor for seleced economies in he chosen year (). is he iniial share of world markes in world impors Daa sources: Trade daa can be obained from he ITC Trade Map and he Unied Naions Commodiy Trade daabase (COMTRADE). Inernaional Trade Cenre (ITC) 38

41 ITC s Marke Analysis and Research TPI Technical Noes C1.b - INITIAL GEOGRAPHIC SPECIALISATION, p.a. (%) Wha does i ell us? The iniial geographic specialisaion index represens a quoa of he relaive change of world marke share. This index shows he benefis associaed wih he iniial specialisaion of domesic exporers on dynamic markes. I correspon o hypoheical gains or losses in a counry s aggregae marke share ha would occur if changes were only due o he dynamism of is parner counries, regardless of any variaions in he counry s marke shares in hese markes. Sudan Qaar Paraguay Neherlan Mongolia rank 136 Definiion: Liberia 13 Iniial marke share of he exporing counry in parner counries imes he change in he share of parner counries in world rade (weighed average of variaions in he relaive imporance of expor markes). Greece Range of values: Takes values beween and +. The overall effec (he weighed average of he variaion in he share of parner counries in world impors) is posiive if he counry is well posiioned on dynamic desinaion markes in he beginning of he ime period. Example: The above figure depics iniial geographic specialisaion (by ranking) for he Mineral secor for seleced economies in he chosen year (). Inernaional Trade Cenre (ITC) 39

42 ITC s Marke Analysis and Research TPI Technical Noes C1.b - TECHNICAL NOTES Mahemaical definiion: 0 X djs X j 0 js X js X js0 0 X ws X ws where is he curren year, 0 is he firs year considered, d is he counry under sudy, j is he parner counry, s is he seleced secor, and X are he expors ( are world expors for secor s). 0 X djs X js0 X X Iniial geographic specialisaion Rank Greece Liberia Mongolia Neherlan Paraguay Qaar Sudan 0.06% 0.15% 0.14% -0.02% 0.05% 0.04% 0.14% is he counry s iniial share in he parner counry s Sample calculaion: impors. js ws Counry X X 0 js 0 ws is he variaion in he share of he parner s The able above presens iniial geographic specialisaion s daa and rank for he Mineral secor for seleced economies in he chosen year (). counry impors in world impors. Daa sources: Trade daa can be obained from he ITC Trade Map and he Unied Naions Commodiy Trade daabase (COMTRADE). Inernaional Trade Cenre (ITC) 40

43 ITC s Marke Analysis and Research TPI Technical Noes C1.c - INITIAL PRODUCT SPECIALISATION, p.a. (%) Wha does i ell us? The iniial produc specialisaion index represens a quoa of he relaive change of world marke share. This index shows he gains or losses associaed wih he iniial secoral specialisaion of domesic supply on producs characerised by dynamic demand. Definiion: Change in he share of elemenary markes in world rade imes he difference beween he iniial share of he exporing counry in elemenary markes and he iniial marke share of he exporing counry in desinaion markes (iniial produc orienaion weighed average of changes in desinaion marke's share in world impors). Range of values: Sudan Qaar Paraguay Neherlan Mongolia Liberia Greece rank Takes values beween and +. The effec is posiive if boh facors go in he same direcion, i.e. if he share of an impor marke in world impors increases (declines) and he secor is over (under)- represened in he counry s expors o is parner and vice-versa. The overall effec is posiive if he counry is well posiioned on dynamic producs in he beginning of he ime period. Example: The above figure depics iniial produc specialisaion (by ranking) for Mineral secor for seleced economies in he chosen year (). Inernaional Trade Cenre (ITC) 41

44 ITC s Marke Analysis and Research TPI Technical Noes C1.c - TECHNICAL NOTES Mahemaical definiion: 0 X djs X dj0 X js X js0 j X 0 X 0 X X 0 w j w js where is he curren year, 0 is he firs year considered, d is he counry under sudy, j is he parner counry, s is he seleced secor, and X are he expors ( are world expors for secor s). 0 X djs X dj0 is he difference beween he counry s iniial X 0 X 0 j js marke share in impor markes and he counry s iniial marke share in he parner counry s oal impors. X js X js0 is he variaion in he share of impor markes in X X 0 w w Counry Iniial produc specialisaion Rank Greece Liberia Mongolia Neherlan Paraguay Qaar Sudan 0.01% -0.02% 0.02% 0.00% -0.03% 0.08% -0.11% Sample calculaion: The able above presens iniial produc specialisaion s daa and rank for he Mineral secor for seleced economies in he chosen year (). world impors. Daa sources: Trade daa can be obained from he ITC Trade Map and he Unied Naions Commodiy Trade daabase (COMTRADE). Inernaional Trade Cenre (ITC) 42

45 ITC s Marke Analysis and Research TPI Technical Noes C1.d - ADAPTATION EFFECT, p.a. (%) Wha does i ell us? The adapaion effec index represens a quoa of he relaive change of world marke share. This index shows he abiliy o adjus expor supply o changes in world demand of a specific counry s secor. Definiion: Sudan Qaar Paraguay Neherlan Rank Change in he share of he elemenary markes in world rade imes he change in he exporing counry's marke share in hese elemenary markes. Range of values: Takes values beween and +. The effec is posiive if he counry s marke share increases in a growing impor marke (+,+) or declines in a declining marke (, ). The effec is negaive if he counry s marke share increases in a declining impor marke (+, ) or declines in a growing marke (,+). Mongolia Liberia Greece 2 Example: The above figure depics adapaion effec (by ranking) for he Mineral secor for seleced economies in he chosen year () Inernaional Trade Cenre (ITC) 43

46 ITC s Marke Analysis and Research TPI Technical Noes C1.d - TECHNICAL NOTES Mahemaical definiion: j X X djs js X X 0 djs 0 js X X js w X X where is he curren year, 0 is he firs year considered, d is he counry under sudy, j is he parner counry, s is he seleced secor, w is he se of all exporing counries and X are he expors. 0 X djs X djs is he variaion in he counry s marke share in 0 X js X js impor markes. 0 X js X js is he variaion in he share of impor marke in 0 X w X w world impors. 0 js 0 w Counry Adapaion effec Rank Greece -0.08% 140 Liberia 0.48% 2 Mongolia -0.04% 123 Neherlan 0.02% 49 Paraguay -0.05% 128 Qaar -0.07% 134 Sudan 0.10% 21 Sample calculaion: The able above presens adapaion effec s daa and rank for he Mineral secor for seleced economies in he chosen year (). Daa sources: Trade daa can be obained from he ITC Trade Map and he Unied Naions Commodiy Trade daabase (COMTRADE). Inernaional Trade Cenre (ITC) 44

47 ITC s Marke Analysis and Research TPI Technical Noes C2. - MATCHING WITH DYNAMICS OF WORLD DEMAND Wha does i ell us? This index is calculaed wih a view o ranking counries according o heir abiliy o adap o he dynamics of world demand. I is a focus of he naional expor porfolio on he world s mos dynamic producs. Definiion: Spearman s rank correlaion beween he ranking share of he exporing counries expor producs in is oal expors, and he rank of growh ren in worldwide expors of hose producs. Range of values: Sudan Qaar Paraguay Neherlan Mongolia Liberia Greece Rank Each counry is given a correlaion index ha akes a value beween 1 and 1. A value of 1 (-1) indicaes ha he relaive imporance of a counry s expored goo is in full accordance (discordance) wih he ranking of world expor growh raes for he same goo. The counry ranking is dependen on he rank correlaion index. The closer he index is o 1, he beer he counry ranking under analysis Example: The above figure depics he maching wih dynamics of world demand index (by ranking) for he Mineral secor for seleced economies in he chosen year (). Inernaional Trade Cenre (ITC) 45

48 ITC s Marke Analysis and Research TPI Technical Noes C2. - TECHNICAL NOTES Mahemaical definiion: Counry Maching wih dynamics of world demand (rank) I is based on Spearman s rank correlaion beween he ranking in share of he exporing counries expor producs in is oal expors, and he rank of growh ren in worldwide expors of hose producs, belonging o he secor s. Daa sources: Trade daa can be obained from he ITC Trade Map and he Unied Naions Commodiy Trade daabase (COMTRADE). Greece 57 Liberia 141 Mongolia 144 Neherlan 86 Paraguay 115 Qaar 85 Sudan 156 Sample calculaion: The able above presens ranking of he maching wih dynamics of world demand index for seleced economies for he Mineral secor in he chosen year (). Inernaional Trade Cenre (ITC) 46

49 ITC s Marke Analysis and Research TPI Technical Noes 7. Appendixes 7.1. Appendix 1: More on he use of differen dispersion indicaors This appendix illusraes he need of using wo differen measures of diversificaion wih an example. Le us consider he daa on 4 counries and 10 indusries displayed in Table 2. Counry A exhibis uniformiy in he level of specialisaion in is secors, hereby achieving he highes level of diversificaion. Counry B is specialised wih equal inensiy in 5 ou of he 10 secors. Counry C expors producs in 8 secors and is highly specialised in secor 7, which accouns for 35% of is expors. Lasly, counry D exhibis he same specialisaion paerns bu enfold. The choice beween he wo indicaors is no he same for counry A and B on he one hand, and B and C on he oher hand. Neiher indicaor discriminaes simulaneously beween counries belonging o each of hese pairs. Consider he counry pair A and B: he spread is zero in boh cases (indicaing uniformiy in he specialisaion in indusries) whereas he equivalen number is wice as large for counry A (indicaing ha counry A is diversified wice as much as B). The spread does no ake ino accoun he number of secors in which a counry is acive, bu only he share of each secor in oal expors. The equivalen number, on he oher hand, ignores he differences in each secor s share o oal expors and only focuses on he number of secors a counry is acive in. Hence, he spread indicaor does no disinguish any differences beween counry A and counry B, whereas he equivalen number fin differences beween hem. In he case of counries B and C, he opposie resul is obained. The equivalen number of markes of equal size is 5 in boh cases. However, since he dispersion is much larger in counry C, he spread can rank hese wo counries. In sum, counry A is he mos diversified counry, followed by B. Counries C and D are he leas diversified. Lasly, he comparison of resuls for counries C and D highlighs he advanage of using he weighed spread insead of he sandard deviaion. Using he sandard Inernaional Trade Cenre (ITC) 47

50 ITC s Marke Analysis and Research TPI Technical Noes deviaion, he dispersion in counry D is en imes larger han in counry C, even hough only heir size differs. Table 2. Daa and calculaions of he measures of diversificaion Counry A Counry B Counry C Counry D Secor Secor Secor Secor Secor Secor Secor Secor Secor Secor Toal Expors Equivalen number Sandard deviaion Weighed spread Rank - equivalen number Rank - weighed spread Ranking Appendix 2: Definiion of secors SITC Rev.3 Secors Producs 1 - Fresh food and raw agro-based producs 001 LIVE ANIMALS 075 SPICES 011 BOVINE MEAT 121 TOBACCO, UNMANUFACTURED 012 OTHER MEAT, MEAT OFFAL 211 HIDES,SKINS(EX.FURS),RAW 034 FISH,FRESH,CHILLED,FROZN 212 FURSKINS, RAW 036 CRUSTACEANS,MOLLUSCS ETC 222 OILSEED(SFT.FIX VEG.OIL) 041 WHEAT, MESLIN, UNMILLED 223 OILSEED(OTH.FIX.VEG.OIL) 0421 RICE 231 NATURAL RUBBER, ETC. 043 BARLEY, UNMILLED 261 SILK 044 MAIZE UNMILLED 263 COTTON 045 OTHER CEREALS, UNMILLED 264 JUTE,OTH.TEXTL.BAST FIBR 054 VEGETABLES 265 VEGETABLE TEXTILE FIBRES 057 FRUIT,NUTS EXCL.OIL NUTS 268 WOOL, OTHER ANIMAL HAIR 071 COFFEE,COFFEE SUBSTITUTE 291 CRUDE ANIMAL MATERLS.NES 072 COCOA 292 CRUDE VEG.MATERIALS, NES 074 TEA AND MATE Inernaional Trade Cenre (ITC) 48

51 ITC s Marke Analysis and Research TPI Technical Noes 2 - Processed food and agro-based producs 016 MEAT,ED.OFFL,DRY,SLT,SMK 059 FRUIT, VEGETABLE JUICES 017 MEAT,OFFL.PRPD,PRSVD,NES 061 SUGARS,MOLASSES,HONEY 022 MILK AND CREAM 062 SUGAR CONFECTIONERY 023 BUTTER,OTHER FAT OF MILK 073 CHOCOLATE,OTH.COCOA PREP 024 CHEESE AND CURD 081 ANIMAL FEED STUFF 025 EGGS,BIRDS,YOLKS,ALBUMIN 091 MARGARINE AND SHORTENING 035 FISH,DRIED,SALTED,SMOKED 098 EDIBLE PROD.PREPRTNS,NES 037 FISH ETC.PREPD,PRSVD.NES 111 NON-ALCOHOL.BEVERAGE,NES 0422 RICE 112 ALCOHOLIC BEVERAGES 0423 RICE 122 TOBACCO, MANUFACTURED 046 MEAL,FLOUR OF WHEAT,MSLN 411 ANIMAL OILS AND FATS 047 OTHER CEREAL MEAL,FLOURS 421 FIXED VEG.FAT,OILS, SOFT 048 CEREAL PREPARATIONS 422 FIXED VEG.FAT,OILS,OTHER 056 VEGTABLES,PRPD,PRSVD,NES 431 ANIMAL,VEG.FATS,OILS,NES 058 FRUIT,PRESERVED,PREPARED 551 ESSNTL.OIL,PERFUME,FLAVR 3 - Wood, wood producs and paper 244 CORK,NATURAL,RAW;WASTE 633 CORK MANUFACTURES 245 FUEL WOOD, WOOD CHARCOAL 634 VENEERS, PLYWOOD, ETC. 246 WOOD IN CHIPS, PARTICLES 635 WOOD MANUFACTURES, NES 247 WOOD ROUGH,ROUGH SQUARED 641 PAPER AND PAPERBOARD 248 WOOD, SIMPLY WORKED 642 PAPER,PAPERBOARD,CUT ETC 251 PULP AND WASTE PAPER e 8215 Wooden furniure 4 - Yarn, fabrics and exiles 651 TEXTILE YARN 656 TULLE,LACE,EMBROIDRY.ETC 652 COTTON FABRICS, WOVEN 657 SPECIAL YARN,TXTL.FABRIC 653 FABRICS,MAN-MADE FIBRES 658 TEXTILE ARTICLES NES 654 OTH.TEXTILE FABRIC,WOVEN 659 FLOOR COVERINGS, ETC. 655 KNIT.CROCHET.FABRIC NES 5 - Chemicals 232 SYNTHETIC RUBBER, ETC. 554 SOAP,CLEANERS,POLISH,ETC 266 SYNTHETIC FIBRES 562 FERTILIZER,EXCEPT GRP OTHER MAN-MADE FIBRES 571 POLYMERS OF ETHYLENE 511 HYDROCARBONS,NES,DERIVTS 572 POLYMERS OF STYRENE 512 ALCOHOL,PHENOL,ETC.DERIV 573 POLYMERS,VINYL CHLORIDE 513 CARBOXYLIC ACIDS,DERIVTS 574 POLYACETAL,POLYCARBONATE 514 NITROGEN-FUNCT.COMPOUNDS 575 OTH.PLASTIC,PRIMARY FORM 515 ORGANO-INORGANIC COMPNDS 579 PLASTIC WASTE, SCRAP ETC 516 OTHER ORGANIC CHEMICALS 581 PLASTIC TUBE,PIPE,HOSE 522 INORGANIC CHEM.ELEMENTS 582 PLASTIC PLATE,SHEETS,ETC 523 METAL.SALTS,INORGAN.ACID 583 MONOFILAMENT OF PLASTICS 524 OTHER CHEMICAL COMPOUNDS 591 INSECTICIDES, ETC. 525 RADIO-ACTIVE MATERIALS 592 STARCHES,INULIN,ETC. 531 SYNTH.COLOURS,LAKES,ETC. 593 EXPLOSIVES,PYROTECHNICS 532 DYEING,TANNING MATERIALS 597 PREPRD ADDITIVES,LIQUIDS Inernaional Trade Cenre (ITC) 49

52 ITC s Marke Analysis and Research TPI Technical Noes 533 PIGMENTS, PAINTS, ETC. 598 MISC.CHEMICAL PRODTS.NES 541 MEDICINES,ETC.EXC.GRP MATERIALS OF RUBBER 542 MEDICAMENTS 625 RUBBER TYRES,TUBES,ETC. 553 PERFUMERY,COSMETICS,ETC. 629 ARTICLES OF RUBBER, NES 6 - Leaher and leaher producs 611 LEATHER 831 TRUNK,SUIT-CASES,BAG,ETC 612 MANUFACT.LEATHER ETC.NES 851 FOOTWEAR 613 FURSKINS,TANNED,DRESSED 7 - Meal and oher basic manufacuring 661 LIME,CEMENT,CONSTR.MATRL 681 SILVER,PLATINUM,ETC. 662 CLAY,REFRCT.CONSTR.MATRL 682 COPPER 663 MINERAL MANUFACTURES,NES 683 NICKEL 664 GLASS 684 ALUMINIUM 665 GLASSWARE 685 LEAD 666 POTTERY 686 ZINC 670 REST OF 67 NOT DEFINED 687 TIN 671 PIG IRON,SPIEGELEISN,ETC 689 MISC.NON-FERR.BASE METAL 672 INGOTS ETC.IRON OR STEEL 691 METALLIC STRUCTURES NES 673 FLAT-ROLLED IRON ETC. 692 CONTAINERS,STORAGE,TRNSP 674 FLAT-ROLLED PLATED IRON 693 WIRE PRODUCTS EXCL.ELECT 675 FLAT-ROLLED, ALLOY STEEL 694 NAILS,SCREWS,NUTS,ETC. 676 IRON,STL.BAR,SHAPES ETC. 695 TOOLS 677 RAILWAY TRACK IRON,STEEL 696 CUTLERY 678 WIRE OF IRON OR STEEL 697 HOUSEHOLD EQUIPMENT,NES 679 TUBES,PIPES,ETC.IRON,STL 699 MANUFACTS.BASE METAL,NES 8 - Non-elecric machinery 711 STEAM GENER.BOILERS,ETC. 731 METAL REMOVAL WORK TOOLS 712 STEAM TURBINES 733 MACH-TOOLS,METAL-WORKING 713 INTRNL COMBUS PSTN ENGIN 735 PARTS,NES,FOR MACH-TOOLS 714 ENGINES,MOTORS NON-ELECT 737 METALWORKING MACHNRY NES 716 ROTATING ELECTRIC PLANT 741 HEATNG,COOLNG EQUIP,PART 718 OTH.POWR.GENRTNG.MACHNRY 742 PUMPS FOR LIQUIDS,PARTS 721 AGRIC.MACHINES,EX.TRACTR 743 PUMPS NES,CENTRIFUGS ETC 722 TRACTORS 744 MECHANICAL HANDLNG EQUIP 723 CIVIL ENGINEERING EQUIPT 745 OTH.NONELEC MCH,TOOL,NES 724 TEXTILE,LEATHER MACHINES 746 BALL OR ROLLER BEARINGS 725 PAPER,PULP MILL MACHINES 747 TAPS,COCKS,VALVES,ETC. 726 PRINTNG,BOOKBINDNG MACHS 748 TRANSMISSIONS SHAFTS ETC 727 FOOD-PROCESS.MCH.NON DOM 749 NON-ELECT MACH.PARTS,ETC 728 OTH.MACH,PTS,SPCL INDUST 9 - Compuers, elecomm; cons. Elecronics 751 OFFICE MACHINES 762 RADIO-BROADCAST RECEIVER 752 AUTOMATC.DATA PROC.EQUIP 763 SOUND RECORDER,PHONOGRPH 759 PARTS,FOR OFFICE MACHINS 764 TELECOMM.EQUIP.PARTS NES 761 TELEVISION RECEIVERS ETC Inernaional Trade Cenre (ITC) 50

53 ITC s Marke Analysis and Research TPI Technical Noes 10 - Elecronic componens 771 ELECT POWER MACHNY.PARTS 775 DOM.ELEC,NON-ELEC.EQUIPT 772 ELEC.SWITCH.RELAY.CIRCUT 776 TRANSISTORS,VALVES,ETC. 773 ELECTR DISTRIBT.EQPT NES 778 ELECTRIC.MACH.APPART.NES 774 ELECTRO-MEDCL,XRAY EQUIP 11 - Transpor equipmen 781 PASS.MOTOR VEHCLS.EX.BUS 786 TRAILERS,SEMI-TRAILR,ETC 782 GOODS,SPCL TRANSPORT VEH 791 RAILWAY VEHICLES.EQUIPNT 783 ROAD MOTOR VEHICLES NES 792 AIRCRAFT,ASSOCTD.EQUIPNT 784 PARTS,TRACTORS,MOTOR VEH 793 SHIP,BOAT,FLOAT.STRUCTRS 785 CYCLES,MOTORCYCLES ETC. 12 Clohing 841 MENS,BOYS CLOTHNG,X-KNIT 842 WOMEN,GIRL CLOTHNG,XKNIT 845 OTHR.TEXTILE APPAREL,NES 843 MENS,BOYS CLOTHING,KNIT 846 CLOTHING ACCESSRS,FABRIC 844 WOMEN,GIRLS CLOTHNG.KNIT 848 CLOTHNG,NONTXTL;HEADGEAR 13 Misc. manufacuring 811 PREFABRICATED BUILDINGS 885 WATCHES AND CLOCKS 812 PLUMBNG,SANITRY,EQPT.ETC 891 ARMS AND AMMUNITION 813 LIGHTNG FIXTURES ETC.NES 892 PRINTED MATTER 871 OPTICAL INSTRUMENTS,NES 893 ARTICLES,NES,OF PLASTICS 872 MEDICAL INSTRUMENTS NES 894 BABY CARRIAGE,TOYS,GAMES 873 METERS,COUNTERS,NES 895 OFFICE,STATIONERY SUPPLS 874 MEASURE,CONTROL INSTRMNT 896 WORKS OF ART,ANTIQUE ETC 881 PHOTOGRAPH APPAR.ETC.NES 897 GOLD,SILVERWARE,JEWL NES 882 PHOTO.CINEMATOGRPH.SUPPL 898 MUSICAL INSTRUMENTS,ETC. 883 CINE.FILM EXPOSD.DEVELPD 899 MISC MANUFCTRD GOODS NES 884 OPTICAL GOODS NES 14 - Minerals 272 FERTILIZERS, CRUDE 289 PREC.METAL ORES,CONCTRTS 273 STONE, SAND AND GRAVEL 321 COAL,NOT AGGLOMERATED 274 SULPHUR,UNRSTD.IRON PYRS 322 BRIQUETTES,LIGNITE,PEAT 277 NATURAL ABRASIVES, NES 325 COKE,SEMI-COKE,RET.CARBN 278 OTHER CRUDE MINERALS 333 PETROLEUM OILS, CRUDE 281 IRON ORE, CONCENTRATES 334 PETROLEUM PRODUCTS 282 FERROUS WASTE AND SCRAP 335 RESIDUAL PETROL.PRODUCTS 283 COPPER ORES,CONCENTRATES 342 LIQUEFIED PROPANE,BUTANE 284 NICKEL ORES,CONCTR,MATTE 343 NATURAL GAS 285 ALUMINIUM ORE,CONCTR.ETC 344 PETROLEUM GASES, NES 286 URANIUM,THORIUM ORES,ETC. 345 COAL GAS,WATER GAS, ETC. 287 ORE,CONCENTR.BASE METALS 351 ELECTRIC CURRENT 288 NON-FERROUS WASTE,SCRAP 667 PEARLS,PRECIOUS STONES Inernaional Trade Cenre (ITC) 51

54 ITC s Marke Analysis and Research TPI Technical Noes Inernaional Trade Cenre (ITC) 52