THE EXPORT COMPETITIVENESS OF ASEAN COUNTRIES 1985-95: A DYNAMIC SHIFT AND SHARE APPROACH

Abstract

Trade and foreign direct investment provide an important life-blood for an economy to develop and grow since the 1980s. This is evident in many Asian countries, predominantly in the Newly Industrialising Economies (NIEs) and to a lesser extent in ASEAN countries. In particular, to ASEAN, trade also acts as a bridge to link ASEAN members in a network of co-operation and competition. Co-operation takes place in the form of intra-ASEAN trade and joint venture projects while competition arises from vying for export share in the outside markets such as Japan, the US, and the EU. The latter competition is of more recent concern as ASEAN countries are increasingly competing in similar exports to similar markets and extra-regional trade constitutes 79.5% of ASEAN total trade (in 1995) as compared to intra-ASEAN trade (20.5%). Therefore, this paper attempts to examine the export competitiveness of selected ASEAN countries - namely Singapore, Malaysia, Thailand, Indonesia and Philippines - in the US and Japanese markets between 1986-1995 using dynamic shift-share analysis. To narrow the scope, only the top six manufactured exports (at the 2-digit SITC level) to these markets are selected. Our findings reveal that significant changes in competitiveness can be seen in these ASEAN countries over this period.