Measuring The Comparative Advantage of Fishery Industry in Malaysia using the Revealed Comparative Advantage Model
This paper aims to measure and rank the comparative advantage of Malaysia's fishery industry with selected neighbouring countries.
This study adopts Balassa's (1989) 's Revealed Comparative Advantage (RCA) model to identify the comparative advantages of Malaysia in the fishery sector compared with the neighbouring countries. The data span the period from 1995 up to 2015 (annually). The primary data on export (X) and import (M) flows based on the Harmonized System (HS) nomenclature, which is derived from the UN COMTRADE database and the Department of Fishery Malaysia. The broad product groups in the HS code will be referred to under the fishery code of HS03. The results from these data are computed using the EViews software.
Based on the results, Malaysia and Singapore were identified to have a comparative advantage in the production of live fish, while Vietnam is a comparative advantage in fish fillet and frozen fish meat, Thailand is a comparative advantage in dried fish, and Indonesia has a comparative advantage in terms of aquatic invertebrates. This allows the countries to specialize in their comparative advantage to increase fishery export production. Besides that, in the long run, if the nation improves its comparative advantage in export in terms of its production by improving the allocation of resources, this will contribute to the country's economic growth.
The study can be extended to different aspects of issues such as the effectiveness of trade policies, the impact of global issues and the preferences of the consumers by incorporating different competitiveness models.
This study provides references to the policymakers to determine the appropriate policies to aid the difficulties faced by the fish sector in increasing their competitiveness in the global market and to aid the shortages in food security.