Investigating Pakistan’s Revealed Comparative Advantage and competitiveness in Cotton Sector
DOI:
https://doi.org/10.26710/reads.v5i1.570Keywords:
Competitiveness, Comparative Advantage, Cotton Sector, Textile, Agricultural SectorAbstract
Cotton sector, one of the most important sectors of agriculture, plays a pivot role in the socio-economic uplift of Pakistan as its contribution to agriculture value addition is 5.5 % and to GDP is 1 %. It along with low wage cost also ensures the massive availability of raw material for textile industry which enables Pakistan to attain competitiveness in the world market. The aim of present study is ,therefore, to measure the export competitiveness in cotton sector of Pakistan by utilizing a set of Revealed competitive advantage and Revealed comparative advantage (RCA) indices such as RCA, RCA#, Symmetric Comparative index (RSCA), Revealed Import Advantage index (RMA), Net export index (NEI)and Revealed Trade Advantage index (RTA) vis-a-vis world trade. The data was taken from International Trade Center (ITC) UN-COMTRADE Statistics for Pakistani cotton from 2003-17. The results of the study explored that Pakistan had a comparative and competitive advantage in cotton exports, while comparative disadvantage in cotton imports. Moreover, Pakistan had net competitive advantage in cotton sector.The study suggests that there should be more emphasis on Infrastructure, reduction in the cost of production, utilities and finance, use of modern technology, investment in agricultural sector and marketing in international market to boost the exports volume of cotton. Net export index (NEI), Revealed, Symmetric Comparative index (RSCA) (Larsen 1998), Vollrath index (1991) (RCA#), Revealed Import Advantage index (RMA) and Revealed Trade Advantage index (RTA).
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