Revealed comparative advantage and constant market share analysis of Indonesian cinnamon in the world market Online publication date: Fri, 12-Mar-2021
by Evi Thelia Sari; Maria Rochelle G. Divinagracia
International Journal of Economic Policy in Emerging Economies (IJEPEE), Vol. 14, No. 2, 2021
Abstract: The study analysed the RCA and CMS of Indonesian cinnamon in the world market. Data on all types of cinnamon products traded by Indonesia to USA and the world market from 1987 to 2017 were retrieved from the UN Comtrade. Results showed that Indonesian cinnamon has comparative advantage in either the world or US market because the RCA value is greater than one. The CMS analysis indicated that Indonesian cinnamon garnered positive signs for the world effect, commodity growth effect, and competitiveness. The negative sign of market distribution implied the difficulty of Indonesian cinnamon to increase its volume of exports to the US market. The Indonesian government should identify other markets, and not solely depend on the requirements of the US market. There is an opportunity for Indonesians to grow and produce cinnamon to increase its supply to existing and potential markets.
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