CMS-models used to examine the competitiveness of agricultural foreign trade

Poór, Judit

Keywords: agricultural foreign trade, competitiveness, CMS model

This paper aims to introduce three CMS models used in the international literature to examine the competitiveness of agricultural foreign trade, highlighting their similarities and differences. Essentially, each model examines the growth of the reference market, the changes in the product and market composition, and the changes in the shares of the products and destination countries indicating competitiveness, as factors underlying the growth in exports.
There are similarities among the components of the various models. The factors examined by the Fagerberg-Sollie model are in terms of substance similar to those of the other two models, while the focus of the investigation is essentially different. Changes in the aggregate share in exports are underpinned by changes in the shares at the level of products and destination countries (competitiveness factors) and the impact of changes in product composition and market distribution, which naturally has an impact on aggregated exports. Built into a one-step model, the Fagerberg-Sollie model would enable a more complex analysis of the competitive effect in the two-step Jepma model.
The models help to examine the weight of components in the changes of shares and exports with the help of a distribution ratio, which can firstly help the evaluation of the results and secondly enable the comparison of the countries.

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