The export competitiveness of Vietnam tuna industry in the global market: Evidence from revealed comparative advantage and constant market share of harmonized system code 6-digit products

Abstract

Export competitiveness is essential to a country's global success. In this study, we assess the competitiveness of Vietnam's Tuna industry compared to its major competitors (Ecuador, Indonesia, Taipei – China, and Thailand) in the most significant world tuna-importing regions (ASEAN, Japan, the Middle East, the EU, and US) at four detailed industry codes, namely fresh or chilled tuna (0302:31, 32, 33, 34, 35, 35, 36, 39), frozen tuna (0303:41, 42, 43, 44, 45, 46, 49), filets (0304-87), and preserved tuna (1604:14). The analysis is based on the secondary data from the International Trade Centre database (Trade Map/COMTRADE) and the UNCTAD stat database in period 2007-2019, using the RCA (Revealed Comparative Advantage) and the CMS (Constant Market Share) analysises. The RCA reveals that Vietnam's competitiveness in exporting 0302 tuna declined significantly after 2012, especially in the US and Japanese markets, while competitors like Ecuador and Taipei (China) capitalized on the market. The CMS shows that although the competitiveness effect had different values in each market, it tended to remain the same. For Tuna 0303: The RCA value declined significantly across all markets, especially evident in the Middle East; meanwhile, competitors like Ecuador held a significant advantage in key markets like the EU. Results from CMS show that the demand for Vietnam's tuna 0303 decreased. Besides, for the commodity composition effect, from period I-II, its value increased sharply, but when entering period III, it started to decrease. The market distribution effect fluctuates strongly. For Tuna 0304: The RCA reveals that Vietnam dominated the export of 0304 tuna in all markets, with a consistently high RCA value. The standard world growth effect value increased considerably. Vietnam's market distribution and competitiveness affect positive growth in all markets except the ASEAN. For the prepared or preserved tuna product (1604), its comparative advantage in the US, Japan, EU, and Middle East markets was average and tended to decrease. Only in the ASEAN market did Vietnam have a relatively high comparative advantage. In general, a comparison with crucial competitors shows that Vietnam's level of competitiveness is similar due to the influence of resources, market demand, and technological capacity, but Vietnam holds a competitive edge in tuna exports in key markets. An investment policy is being implemented to assist fishermen, including procuring novel, high-capacity vessels outfitted with fishing equipment and facilities designed to enhance quality preservation. Furthermore, ongoing endeavors are to enhance fish consumption and foster collaborations between the fishing sector and fishermen. In addition, there is a focus on enhancing fisheries logistics services to reduce expenses before exporting to global markets.

Introduction

Export competitiveness (EC) is a means to achieve global competitiveness 1 , 2 , 3 . The term EC pertains to the capacity of a country or region to effectively create and possess markets, as well as generate profits, in foreign marketplaces where its products are traded 4 . In the past thirty years, the research on EC has achieved remarkable advancements and garnered recognition as a distinct concept 5 . There have been endeavors to construct theoretical frameworks encompassing certain aspects of EC 6 , 7 . Besides, EC was assessed at different levels, including the product level 8 , firm level 9 , 10 , regional level 11 , industry level 12 , 13 , and country level 14 , 15 , 16 , 17 . However, in previous studies, commodity EC was examined at an aggregate level 5 , 18 . A practical issue of utmost importance for a country with a substantial agricultural sector is maintaining sustainability and increasing its agricultural products' international competitiveness 8 , 15 , 17 . The tuna export industry has been one of the critical structural sectors in Vietnam over the past 15 years, accounting for 21.56% of total seafood exports in 2021, playing an essential role in the global value chain, with 5.0% of the total tuna exported worldwide. However, Vietnam's tuna export value is only about 35.0% of Thailand's and Indonesia's, but Indonesia, Vietnam, and Thailand have similar advantages in this industry. The research landscape regarding the competitiveness of Vietnam's tuna export industry presented a noticeable disparity compared to other countries in the region and the whole world 19 , 20 .

This study aims to determine Vietnam's tuna industry's current position and competitiveness in comparison with its major competitors (Ecuador, Indonesia, Taipei – China, and Thailand) in the largest tuna-importing regions (ASEAN, Japan, the Middle East, the EU, and US) at the HS (harmonized system) 06-digit levels, namely fresh or chilled tuna (0302:31, 32, 33, 34, 35, 35, 36, 39), frozen tuna (0303:41, 42, 43, 44, 45, 46, 49), filets (0304-87), and preserved tuna (1604:14). The study used the RCA and CMS approach to analyze data from 2007 to 2019.

Literature review

The economic literature focuses on the concept of comparative advantage, while the business literature has recently developed the concept of competitive advantage 3 , 5 , 21 . However, comparative advantage and competitiveness have many things in common 21 . A country's comparative advantage makes it capable of creating more value in the long run than the products it produces, in which it lacks the comparative advantage. Thanks to comparative advantages, countries will generate higher profits and greater competitiveness 21 .

Several theories exist to elucidate the variables influencing the competitiveness of agricultural and agro-industrial product exports worldwide, including the Theory of Comparative Advantage, the Resource Endowment Theory, and the Theory of International Trade. The Heckscher-Ohlin-Samuelson theorem posits that countries will export goods that utilize the factor relatively more abundantly in their production, be it capital- or labor-intensive.

Many different methods are used across many fields to consider competitiveness. Comparative advantages such as revealed comparative advantage, constant market share, compound annual growth rate, trade competitiveness, trade intensity index, creation, and redirection index trade, revealed normalized comparative advantage approach had been used to analyze a country's competitiveness and examine competitiveness and trade structure of different economies and sectors in many industries.

The RCA index is a comprehensive and widely accepted measure in the literature to assess a country's export competitiveness in specific products 22 . Balassa estimated the index of RCA to compare a country's specialization level and competitive position in exporting goods and services among major exporting countries in the world 23 . The RCA index is calculated based on export performance and observed trade patterns 24 , providing insight into a country's comparative advantage from trade data 24 .

The Constant Market Share model assumes that a country's export market share remains stable in the absence of external disruptions and if it maintains competitiveness in its home market. In contrast to traditional market share analysis, which compares a country's exports to the total imports of partner countries, the Constant Market Share (CMS) delves deeper, enabling researchers to isolate the factors driving export growth beyond global trends. The CMS model, introduced by Richardson, offers a framework for analyzing export performance 25 . The CMS assesses competitiveness retrospectively, comparing a specific country's exports with global exports 26 , 27 . The CMS analysis categorizes export performance into four distinct effects: the impact of global economic growth, the influence of commodity composition, the effect of market distribution, and a residual competitiveness effect 28 . Despite theoretical and empirical criticisms against the CMS approach, its popularity in international trade analysis persisted and was adjusted to analyze four effects of export performance in different contexts 28 . Integrating RCA and CMS methodologies offers significant advantages in analyzing a nation's export competitiveness in the tuna industry.

In the context of this research, utilizing both methods provides a comprehensive and insightful perspective on Vietnam's competitive landscape in the global market. Initially, the RCA method allows for a clear identification of Vietnam's comparative advantage in the tuna sector compared to other nations. It provides an overview of the comparative advantage of Vietnam's tuna exports based on the ratio between exports and production in a specific industry. It shows whether or not Vietnam has a competitive advantage in this industry. Then, based on each specific RCA index, the government can identify which tuna industry codes should be focused on investment and development. Subsequently, the CMS method aids in quantifying and evaluating Vietnam's ability to sustain its competitive advantage over time. By analyzing changes in Vietnam's export market share and the factors influencing it, CMS helps identify internal and market-driven factors that Vietnam needs to address to maintain and enhance its export competitiveness. Integrating data from both methodologies enables this study to identify and assess the factors influencing Vietnam's export competitiveness in the tuna industry, including productivity, product quality, and operational efficiency. Based on this analysis, the government and businesses can guide development policies for the industry by building competitive strategies, such as improving technology, improving product quality, and expanding markets. This contributes to enhancing Vietnam's position in the international market and positively impacts the sustainable development of the domestic tuna industry.

Methodology

Data collection

We determined the HS codes of tuna that have been exported around the world, including four significant codes: fresh or chilled tuna (0302:31, 32, 33, 34, 35, 35, 36, 39), frozen tuna (0303:41, 42, 43, 44, 45, 46, 49), fillets (0304:87), and preserved tuna (1604:14). The analysis used secondary data from the International Trade Centre database, the UNCTAD stat database. We selected five markets that considered the potential for exporting tuna, including the US, Japan, the EU, the Middle East, and ASEAN, from 2007 to 2019. In these five import markets, the group selects the typical countries for each group of tuna export capacity (e.g., in the EU, exporting countries like Vietnam, Ecuador, Thailand, and Indonesia). The team will rely on the above data to calculate the RCA and CMS of each country; each market is then combined with several factors and models for the conclusions.

The Revealed Comparative Advantage

Revealed Comparative Advantage (RCA) is commonly used to identify a particular country's export shift concerning its comparative advantage. RCA is one of the most prominent tools that allow effective measurement of competitiveness among industries (39), developed following the theory of trade for measuring a country's adeptness in exporting a particular commodity compared to a group of other countries 18 . CA has risen to prominence as a pivotal method for elucidating the intricate dynamics of international trade. By employing RCA computations, researchers and policymakers gain valuable insights into the structural shifts unfolding within a country's export sector over specific time intervals. RCA serves as a robust analytical framework, allowing for an in-depth exploration of the intricate relationship between a country's export performance in a particular commodity, its overall export portfolio, and the aggregate exports of that commodity across a diverse set of trading partners. Though numerous formulas devised by eminent scholars exist for computing the RCA index, we utilize the foundational formula articulated by Balassa for this study 23 . This formula, which serves as the cornerstone of our analysis, is shown in Figure 1 .

Figure 1 . The Balassa index (RCA)

Where:

X _ij : Country i’s export of commodity j

X _i : Country i total commodities export to the world

X _mj : Total import value/volume of commodity j in country m

X _m : Total import value/volume of country m.

With:

0 ≤ RCA ≤ 1: no comparative advantage

1 ≤ RCA ≤ 2: a low comparative advantage

2 ≤ RCA ≤ 4: an average comparative advantage

RCA > 4: a high comparative advantage

The Constant Market Share

A country's exports can be classified by applying a constant market share (CMS) model by decomposing export growth into their respective parts (including the standard world growth effect, commodity composition effect, market distribution effect, and competition effect). Thus, the overall CMS identifies a fundamental change in the focus country's exports between the two periods and describes a country's export growth. The CMS model used in this study can be performed in Figure 2 .

Figure 2 . The CMS model

Where:

r: proportionate change in total world exports in aggregate from the initial period (0) to the terminal period (1);

r _i : proportionate change in world exports of the i^th commodity in aggregate from the initial period (0) to the terminal period (1);

r _ij : proportionate change in world exports of commodity i, to market j in aggregate from the initial period (0) to terminal period (1);

: total exports by the focus country of commodity i in the initial period;

: total export by the focus country of commodity i, to the j^th market in the initial period;

: total export by the focus country of commodity i in the terminal period.

Results

Total HS Codes

Total HS Codes

Total HS Codes

Results from Detailed HS Codes

Results from Detailed HS Codes

Results from Detailed HS Codes

Results from Detailed HS Codes

Results from Detailed HS Codes

Discussion

Main findings

Our research determines Vietnam's tuna industry's current position and competitiveness in major import markets (US, Japan, the EU, the Middle East, and ASEAN) with significant competitors (Indonesia, Ecuador, Thailand, and Taipei - China) at four detailed industry codes, namely fresh or chilled tuna (0302:31, 32, 33, 34, 35, 35, 36, 39), frozen tuna (0303:41, 42, 43, 44, 45, 46, 49), fillets (0304-87), and preserved tuna (1604:14), using RCA and CMS approaches from 2007-2019. Specifically, the comparative advantage of tuna filets increased in all five markets, but it was accompanied by a gradual decline in fresh tuna (0302). On the contrary, frozen tuna (0303) experienced significant fluctuations across different periods. Despite growing consumer interest globally, ensuring adequate production volume and quality remains crucial. Vietnam has primarily concentrated on improving the distribution of frozen tuna within the ASEAN market, necessitating a more balanced distribution across other markets.

With 0304 tuna in all five markets from 2012 to 2019, Vietnam always had the highest RCA index compared to rival countries. For the Market Distribution factor, except for the ASEAN market, there was a positive growth in resource allocation when exporting tuna 0304, reaching a positive value during 2015-2019. While the ASEAN market decreased in 2 periods, the value of competitive impact increased slightly in other markets.

For the prepared or preserved tuna product (1604), its comparative advantage in the US, Japan, EU, and Middle East markets was average and tended to decrease. Only in the ASEAN market did Vietnam have a relatively high comparative advantage. This was due to the fluctuating global demand for this industry, and Vietnam tried to distribute canned tuna products more rationally, focusing on the ASEAN market rather than other markets.

A comparison with critical competitors shows that Vietnam's level of competitiveness is similar due to the influence of resources, market demand, and technological capacity 19 , 20 . The RCA indicators of Thailand's tuna exports' competitiveness for 1996–2006 show that Thailand possesses significant advantages in all key export markets, which have remained consistent in the USA, the Middle East, and Japan 29 . The relative revealed comparative trade advantage index results indicate that Indonesia has a tremendous or positive index value in all three main markets of Indonesian tuna products, including Japan, the United States, and Thailand, from 2001-2016. Specifically, the RCA analysis revealed that three types of Indonesian tuna commodities, HS 0302032, 0302033, and 0302034, exhibited comparative competitiveness. Each variety of tuna fish holds a nearly equal market share, with Japan being the dominant consumer.

Theoretical contributions

In this study, we assess the competitiveness of the Tuna Vietnam fishery industry at the HS (harmonized system) 06-digit levels, using RCA and CMS approaches, providing insightful results in critical markets against key competitors. Export competitiveness is essential to a country's global success 3 . Researchers in this field have engaged in ongoing discussions in scholarly publications 2 , 5 , 6 . The EC inspection covered economies as diverse as India, China, and Indonesia. Additionally, it has been explored in ASEAN countries and other countries such as Ghana, the United States, Singapore, and Japan. It is important to note that most of these studies are conducted in diverse industrial sectors, such as the currency markets, agricultural exports, chemicals, electrical machinery, and transportation equipment. Besides, previous studies tend to evaluate the industry's overall competitiveness while ignoring the more specific picture of each sub-sector with its dominant resource requirements and different market attractiveness. The separate use of EC assessment scales can lead to biased results, requiring simultaneous use of scales for comprehensive assessment and critical comparison between results. Finally, the tuna industry plays a vital role in the world fisheries value chain, and the EC will promote its sustainable development.

Policy implications

Vietnam holds a competitive edge in tuna exports to key markets. Strategic policy recommendations are necessary to maintain this position and ensure sustainable industry growth. As mentioned above, code 0304 has a higher comparative advantage than code 0302. Therefore, the Vietnamese government must advocate for appropriate policies for both industry codes to ensure sustainable development. For code 0304, the government needs to encourage businesses to invest more in modern processing technologies and IoT applications in the processing process. These improvements can enhance product quality, elevating code 0304 as Vietnam's primary tuna export. The government should also encourage businesses to adopt digital transformation in automated fish classification and utilize sensors and IoT to monitor storage conditions to maintain fish freshness. Vietnam's Illegal, unreported, and unregulated fishing (IUU) yellow card undermines the competitiveness of the seafood industry, especially in the EU. Immediate action is necessary to improve fishermen's skills and knowledge of standard fishing practices. In addition, the Government of Vietnam will implement a system that aggregates data on fishermen's fishing logs to provide accurate statistical data and timely policies to ensure biological populations, especially tuna. Finally, the government should have support for technological equipment as well as patrol teams to support fishermen in case of emergency to ensure supply. In addition, the Vietnamese government needs to implement measures to ensure a reasonable and optimized allocation of export value among markets. To have a better understanding of imported countries, Vietnam should collect and analyze data regularly so that they can update logistic trends in the world.

Conclusion, limitations, and future research direction

Vietnam's tuna industry has become essential to the global value chain. After analyzing RCA from 2007-2019, Vietnam needed a comparative advantage in the Japanese market. Meanwhile, Vietnam held certain comparative advantages over time with the other four markets. However, these values showed a downward trend in all markets and the downturn of the four codes. Primarily, only tuna with code 0304 was the product that became more precious. Then, based on CMS analysis for each detailed code and the whole tuna industry in 3 periods, including 2007-2010, 2011-2014, and 2015-2019, it shows that Vietnam had improved the quality of exported tuna (especially code 0304) to meet the needs of markets and Vietnam tuna was more popular with consumers around the world, especially in codes 0304 and 1604. However, Vietnam needed to properly allocate the tuna industry and specific groups of tuna to each market. Finally, the study has recommended various measures such as changing from exploitation, processing, preservation, and boosting product quality to distribution for each tuna industry code and the whole tuna industry.

Despite efforts to better the study, some limitations still exist. The first is a methodological limitation. Because only two main models are used, RCA and CSM, the study has yet to provide an in-depth analysis of the root causes for the decline of Vietnam's competitive advantage. Second, the study has yet to consider other sectors that use the same resources as tuna. In order to gain a deeper insight into the assessment of Vietnam's fishery export industry, future studies can exploit the following recommendations. The first may be using different supportive models to analyze the factors affecting the RCA and CMS models, such as the FsQCA model. Besides, the research subject is focused on the tuna industry and can be extended to other industries that apply the same resources as tuna.

ABBREVIATIONS

CMS: Constant Market Share

EC: Export competitiveness

IUU: Unreported and unregulated fishing IUU

RCA: Revealed Comparative Advantage

C ONFLICT OF INTEREST

The authors declare that they have no conflicts of interest

AUTHORS’ CONTRIBUTIONS

All authors have contributed equally to the work.