Estimating Export Competitiveness of Selected Moldovan High- Value Added Agricultural Products.

This paper contains the results of the analysis of Moldova’s export competitiveness with regard to high value-added agricultural (HVA) products. In the paper we try to answer the question of whether Moldova has comparative and competitive advantages in the export of HVA products and how it is using these advantages.
In the first – Description of the Problem - chapter, we provide a background on the problem: some facts on the dynamics and underlying causes of the growing world trade in HVA products, and a brief overview of existing studies on Moldova’s agricultural competitiveness. Since these studies are sceptical about Moldova’s competitive position, we assume that Moldova is under-using its competitive potential and under-performing economically. Through our research, we undertake to either support or combat this assumption. We use the findings in existing studies as hypotheses to be tested in the research. We also break down the research problem into specific research questions during the work on the study.
In the second – Theoretical and Conceptual Framework – chapter we define the framework for our analysis of Moldova’s competitiveness. We define the notion of ‘high value-added’ agricultural products and provide a detailed overview of the recent research on the dynamics of the world trade in HVA products, on factors allowing integration into this trade, and on existing trade barriers. In the same chapter, we review the current literature on competitiveness and outline the major definitions of competitiveness and comparative advantage according to both trade-based approach and strategic management approach to
competitiveness. In the same chapter we present a review of recent studies on agricultural competitiveness in Eastern Europe and in Moldova.
In the third – Empirical Research – chapter we present key facts and figures on Moldova’s HVA exports and HVA sector and outline key constraints faced by this sector. We then present our model for analyzing Moldova’s HVA competitiveness, which is a limited selection of tools from the research arsenal presented in the Theoretical and Conceptual Framework chapter, and explain the reasons behind the choice of methods. We proceed to presenting the results of our research of Moldova’s HVA competitiveness based on these tools, namely Jaffee’s determinants of competitiveness, ITC’s dynamic and structural perspective charts, and the RCA analysis of Moldova’s exports.
In the final – Conclusions and Discussion – chapter we present the findings of our research. We start with a review of our hypotheses about Moldova’s competitiveness and comment on their validity based on the research results. We then summarize the key research findings in the form of answers to the research questions outlined in the Development of the Problem chapter. Finally, taking into account the gaps in the existing literature on the subject, we identify the future directions of research on the competitiveness of the Moldova’s HVA sector.
Description of the Problem :
2.1 Facts and Figures on the Problem
Although growing slower than the trade in manufactured goods, the world trade in agricultural products is increasing at a constant pace over the last three decades. At the same time, its structure is changing towards a higher share of high value-added agricultural (HVA) products to the detriment of bulk commodities (Gehlhar and Coyle, 2001; Cranfield et al., 1998). This shift is dictated by changing food consumption patterns in developed countries - that still account for most of the international agricultural trade - and the progress in storing and shipping technologies that allow previously un-traded products to enter international trade (Regmi 2001, Gehlhar and Coyle 2001, Jaffee 1992, Pingali 2005). While the growing import demand from rich countries for high value products is indeed a big opportunity for low income countries to enter new lucrative markets and reduce their dependency on exports of bulk commodities, exporters in these countries are faced with various constraints in using this opportunity (Jaffee 1992, FAO 2005). These constraints are both internal and external. Internal constraints include lack of infrastructure, technologies, business skills and capital (Jaffee 1992, World Bank 2004, Minot and Ngigi 2004, CIAT 2005, OECD 2004). External constraints include various barriers to trade, such as customs tariffs or rising safety and quality standards (Regmi, Gehlhar 2005), and market related barri ...