Revealed Comparative Advantage (RCA) and Constant Market Share Model (CMS) on Thai Natural Rubber

Abstract

Thailand is an agricultural country and the world's leading rice and rubber exporter. Thailand produced natural rubber at 2.039 million tons in 1998 with export about 1.839 million tons. Revealed Comparative Advantage (RCA) and Constant Market Share Model (CMS) techniques are applied to natural rubber in Thailand, using 1991-1998 data. According to RCA index, Indonesian natural rubber shows a comparative advantage or specialization of trade in the U.S. market. Thailand, however, shows no comparative advantage in the U.S. market, with RCA at 0.42-0.96. Using CMS, Thailand was delighted in an actual export growth of natural rubber in the world at $425.91 million, comparing the year 1995-1996 to 1991-1993. By contrast, comparison of the period 1997-1998 to the period1995-1996, the actual export growth was -$125.35 million due to negative effects on standard growth effect, market effect and competitive effect.