Applied Economics & Business

ABSTRACT

This study examines the competitiveness of Sri Lankan rubber products exports in the international market and determines the contributory factors behind the export growth of these products. Four rubber products that account for more than 95% of the rubber products export earnings during the last five years were selected for the analysis. The Constant Market Share model was used to decompose the export growth of these products into the contributing factors responsible for the export performance. Overall, exports of the above mentioned four rubber products to their major import destinations have grown during the study period of 1999-2019. The results of the decomposition analysis revealed that export growth of the Retreated and Solid Tyres (HS 4012) was mainly due to the general and specific competitiveness of the country. The structural factors and the general competitiveness effect together have been more significant in explaining the growth of exports of New Pneumatic Tyres (HS 4011). The export growth of Gloves of Vulcanized, Unhardened Rubber (HS 4015) was primarily determined by the structural effects. The main contributor to the export growth of Other Articles of Vulcanized Rubber (HS 4016) varied across main import destinations. Whilst the general competitive effect was the main contributor to the export growth of this product into the EU and Australia, it was either specific competitive effect or market effect in the USA, Japan and Canada import destinations. Certain innovations are necessary in the case of some products where general or specific competitive effects were not prominent figures that determined their export performance. Further, the dual strategy of penetrating into new markets while improving our share in existing markets through improving competitiveness is essential to improve our share in the global rubber industry.

KEYWORDS: Rubber, Trade, Competitiveness