Boonserm
Boonchroenpol
INSTITUTE OF ACADEMIC
DEVELOPMENT , Amsterdam ,
The Netherlands
June 2012
Trade competition between
two countries happens only if :
- Both countries sell the same product or similar product or substitution product
- Both countries have the same buyer.
If both two conditions are not fulfilled, they are not competitors.
The Ways of Selling Competition
Two countries may compete each other by the following
practice:
- Price reducing
- Quality improvement
Only one or more tactics can be use to achieve selling. One country may use a tactic whereas the
competitor may use the same or different tactic. Price cutting is a risky practice because
another will do the same and both countries will eventually loss.
Trade Competition Probe
Trade Competition Probe is to examine whether a country is
competitor in certain product. The
means to probe this matter are
1. Country
A sells more quantity while country B sell less to the same customers, or
2. Country
A sells at less price then Country B can sell the same product at less quantity
Table 1 Rice exports and
increases of Thailand
and VN
|
Year
|
Export of Thai Rice
|
Export of VN Rice
|
Increase of Thai
export
|
Increase of VN
export
|
|
1
|
20
|
16
|
-
|
-
|
|
2
|
25
|
18
|
5
|
2
|
|
3
|
22
|
22
|
-3
|
4
|
|
4
|
28
|
20
|
6
|
-2
|
|
5
|
25
|
30
|
-3
|
10
|
|
6
|
37
|
35
|
12
|
5
|
|
7
|
33
|
40
|
-4
|
5
|
|
8
|
40
|
36
|
7
|
-4
|
Note:
Not real figure
Table 2 Ranks of Increases of export quantity
|
Increase of Thai
export
(X)
|
Rank of X
|
Increase of VN export
(Y)
|
Rank of Y
|
|
5
|
4
|
2
|
3
|
|
-3
|
3
|
4
|
4
|
|
6
|
5
|
-2
|
2
|
|
-3
|
2
|
10
|
7
|
|
12
|
7
|
5
|
5
|
|
-4
|
1
|
5
|
6
|
|
7
|
6
|
-4
|
1
|
Table
3 Ranks comparison
|
Rank of X or ( r )
|
Rank of Y or ( s )
|
(r – s)2
|
|
4
|
3
|
1
|
|
3
|
4
|
1
|
|
5
|
2
|
9
|
|
2
|
7
|
25
|
|
7
|
5
|
4
|
|
1
|
6
|
25
|
|
6
|
1
|
25
|
|
|
|
90
|
From Table 3 using Spearman’s rank correlation to calculate
rank correlation coefficient.
which can be derived to
where
If the coefficient
The reason is: if the change of selling commodity X
of country A causes an inverse
change in selling the commodity X in country B, then A and B are competitors, if this is not
true then country A and country B are not competitors.
From the above data, we have
That is: there is competition between two countries.
……………………………
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