The constant market share analysis: an application to NR export of major producing countries.
1993
Mohammad H. A. | Habibah S.
The Constant Market Share (CMS) approach has often been used to examine export performance and indicate the direction of competitiveness. Using this approach, results of the study show that the three major producers of natural + rubber differ in terms of export competitiveness. The decomposition of export changes between 1976 and 1990 shows that export from Thailand is the most competitive, followed by Indonesia and Malaysia. In the case of Malaysia, deterioration in + competitiveness is also observed in all the sub-periods studied (1976-80, 1981-35 and 1986-90). Both Thailand and Indonesia experienced deterioration in competitiveness in the first sub-period, but export competitiveness improved in subsequent + sub-periods. The application of the CMS model to decompose export performance of primary commodity exports such as NR, where government intervention is rife, is supplemented by an analysis of supply or ‘internal’ factors. The main supply factors + explaining the erosion of Malaysia’s market share are the decline of the industry due to structural changes in the economy and the rapid increase in the domestic consumption of NR as a result of the development of rubber-based manufacturing industries + after 1985. Consequently, the amount of NR available for export is reduced. Government intervention helped to stimulate the growth of smallholder NR production in Indonesia and Thailand.
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