SHIFT SHARE ANALYSIS FOR FINDING EXPORT POTENTIAL

1. In this Assignment we have selected Vietnam as country of our choice to find out top ten
potential export from the Vietnam
Vietnam’s economy continues to expand at an annual rate in excess of 7%, one of the
fastest growing in the world, but it grew from an
extremely low base, as it suffered the crippling effect of the Vietnam War from the 1950s to the
1970s, as well as the austerity measures
introduced in its aftermath.[14]
In 2012, the communist party was forced to apologise about the
mismanagement of the economy after large
numbers of SOEs went bankrupt and inflation rose. The main danger has been over the bad
debt in the banks totalling to 15% and forecast
growth is 5.2% for 2012 but this is also due to the global economic crisis.[18]
However the
government have launched schemes to reform the
economy such as lifting foreign ownership cap from 49% and partially privatizing the countries
State owned companies which have been
responsible for the recent economic downturn by the end of 2013 the government are expected
to privatize 25–50 percent of most SOEs
only maintaining control on public services and military. The recent reforms have created a
major boom in the Vietnamese stock market as
confidence in the Vietnamese economy are returning
In 2007, Vietnam ran a trade deficit of US$14.1 billion, but the trade deficit for the first half of
2008 alone was measured at US$14.8 billion.[24]
In 2012, Vietnam recorded a trade surplus of US$780 million, the first trade surplus since 1993.
Total trade reached US$228.13 billion, an increase of 12.1% from 2011.
In 2004, Vietnam’s exports of merchandise were valued at US$26.5 billion, and, were growing
rapidly along with imports. Vietnam’s principal
exports were crude oil (22.1%), textiles and garments (17.1%), footwear (10.5%), fisheries
products (9.4%) and electronics (4.1%).
The main destinations of Vietnam's exports were the united
states (18.8%), Japan (13.2%), China (10.3%),Australia (6.9%), Singapore (5.2%), Germany (4.
0%), and the United
Kingdom (3.8%).[14]
states (18.8%), Japan (13.2%), China (10.3%),Australia (6.9%), Singapore (
5.2%), Germany (4.0%), and the United Kingdom (3.8%).[14]
In 2012, export rose 18.2%, valued at US$114.57 billion.[29]
Vietnam's main export market
included the EU with US$20 billion, USA with
US$19 billion, ASEAN with $US 17.8 billion, Japan with US$13.9 billion, China with US$14.2
billion, and South Korea with US$7 billion.[32]
In 2013, export rose 15.4%, valued at US$132.17 billion, of which export of electronics now
comprised 24.5% of total export, compared with

2. a 4.4% in 2008. Textiles and garments are still an important part in Vietnam's export, valued
about US$21.5 billions in 2013.
Methodology
 We have firstfindoutthe exportdata fromVietnamtoworldfor ALL3 -- Sub-Heading (all
6-digit HS codes ) of year 2012 and2013 throughWITS TRADE DATA (UN COMTRADE).Than
we have conductedthe analysisusingSHIFTSHAREmethod. Basedonthe average growthof all
marketsthat are studied,anexpectedgrowthfigure iscomputed.Afterwards,the expected
growthrate of each marketiscomparedwithitsactual growth.If the share ina particular
marketwas increased,the difference in the netshiftissaidtobe positive,otherwise if thereisa
negative netshift,thisimplieslossof the share overthe period.The magnitudeof the gainor
lossstandsfor the differencesbetweenthatmarket’sactual performance andthe performance
it wouldhave hadif itsgrowthrate had beenequal tothe average growthof the whole market.
The shift-share technique whichisastatistical techniqueisemployedtoanalyze data.This
technique analyzeschangesintrade overthe interveningperiodof time onthe basisof the
exportchangesthattake place in the marketshare.
1 We have firstcalculatedthe expectedvalue of the growth whichisthe productof growthall items
and the value at the initial time period.

2 Thenwe have calculated the expectedchange of the value of agrowth variable foraparticularitem
ina giventime period whichisthe difference betweenthe expectedvalue andthe actual value forthe
itemat the endof the initial time period.If E(ΔVi) isthe expectedchange,then
3 Shift-share analysisrequiresmeasurementsonavariable of interest(anexportedproduct) foreach
memberof the group(exporteditems) atthe beginningandendof a specifiedperiodof analysis.
The growth rate (GR) of the item(i) canbe measuredas:
4 Aftercalculatingthiswe have thancalculated The difference betweenthe actual change andthe
expectedchange i.e the netshift.So,the NetShiftis:
5 Nowthe sum of positive netshiftsorthe sumof negative netshifts Srepresentsthe total
absolute netshift
ztiti kVVE  ,, )(
ztitii VVEVE  ,, )()(
ztitii VVV  ,,
)( ii VEVNi 
2
)(
1



n
i
ii VEV
S

3. • 6 Finallywe have calculatedthe the relativegainorlossinthe value of a growthvariable fora
particularproducti, ina giventime periodisdefinedasthe percentage netshift(which
representsmarketgainorloss) Pi
Where
After calculatingPi we have arrangedthe productin decreasingorderof theirPi.Asperthiscalculation
the top tenexportproduct of ALL3 -- Sub-Heading (all 6-digit HS codes)fromVietnamare
Product
code Pi
851712 80.36563992
847130 16.81736354
640399 8.61479818
640419 4.72311308
30617 2.65417084
170199 2.02077619
640391 1.99200279
630312 1.74686034
160521 1.64328019
871120 1.60845861
Andnomenclature are followingof these are
1 Telephone forcellularnetworksorforotherwirelessnetworks
2 Portable automaticdataprocessingmachines,weighingnotmore than10Kg, consistingof atleasta
central processunit(CPU),a keyboard& a display.
3 Other- In FootwearwithOuterSolesof rubber, plastics,leatherorcompositionleather anduppersof
leather
4 Other- InFootwearwithOuterSolesof rubber,plastics,leatherorcompositionleather anduppersof
textile materials
%)100(
S
N
P i
i 

4. 5 OtherShrimps& Prawnsunder - Crustaceans, whetherinshell or not,live ,fresh,chilled,frozen,
dried,saltedorinbrine,smokedcrustaceans,whetherinshellornot,whetherornotcookedbefore,or
duringthe smokingprocess,crustaceans,inshell,cookedbysteaming,orbyboiling.
6 Other- InCane or beetsugarand chemicallypure sucrose,insolidform
7 Coveringthe ankle under- InFootwearwithOuterSolesof rubber,plastics,leatherorcomposition
leather anduppersof leather
8 Of Syntheticfibresunder- Curtains( includingDrapes)andinteriorblinds;curtainorbedvalances
9 Not inAirtightContainer Under - Crustaceans,molluscs&otheraquaticinvertebrates,preparedor
preserved.
10 WithReciprocatinginternal combustionpistonengine of acylindercapacityexceeding50cc but not
exceeding250cc Under- Motorcycles( includingMopeds) &cyclesfittedwithanauxiliarymotor,with
or withoutside - cars; side-cars.