ARMENIA’S COMPARATIVE ADVANTAGE IN PRODUCING AND EXPORTING THE HARMONIZED SYSTEM STANDARD PRODUCT GROUPS

Аннотация

Purpose: to identify those Harmonized System (HS) standard Product Groups of Armenian exported commodities the Government of Armenia would channel its efforts towards promotion of the exports of those groups of interest. Design/methodological approach: values of Balassa (Balassa, 1965), Revealed Symmetric Comparative Advantage (Dalum et al., 1998), Additive Revealed Comparative Advantage (Hoen and Oosterhaven, 2006), Lafay (1992), Relative Trade Advantage, Relative Export Advantage, Revealed Competitiveness (Vollrath, 1991), Net Comparative Advantage (Gnidchenko and Salnikov, 2015) indices have been calculated to identify those product groups (at 2-digit level) that Armenia has a “comparative advantage” in producing thereof based on the selected methods of measurements. Findings: Overall, the broad list of identified product groups amounts to seventeen that comply with all measurement method requirements except one method discussed in the article and these groups are Fish and crustaceans, molluscs and other aquatic invertebrates; Preparations of vegetables, fruit, nuts or other parts of plants; Beverages, spirits and vinegar; Tobacco and manufactured tobacco substitutes; Ores, slag and ash; Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal and articles thereof; imitation jewellery; coin; Iron and steel; Copper and articles thereof; Aluminium and articles thereof; Other base metals; cermets; articles thereof; Clocks and watches and parts thereof; Live animals; Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage; Edible vegetables and certain roots and tubers; Edible fruit and nuts; peel of citrus fruit or melons, Salt; sulphur; earths and stone; plastering materials, lime and cement; Articles of apparel and clothing accessories, not knitted or crocheted. These product groups are revealed as “priority” groups that the exports of thereof Armenia’s Government needs to promote. Conclusion: The identified broad list basically represents agriculture; mining and quarrying; manufacture of food products, beverages, and tobacco products; manufacture of wearing apparel; manufacture of basic metals and etc., meaning that Armenia’s comparative advantage is vulnerable to the performance of a limited number of industries. With respect to the exports promotion efforts the best choice would be to design and implement such measures that would increase the market share in existing markets over the medium term. Practical Implications: The findings of the article could be used by the Ministry of Economic Development and Investments of the Republic of Armenia, and the Development Foundation of Armenia in designing the export promotion strategies for various industries.