Assessing the Comparative Advantage of Malaysia in the Agri- Food Industry

Anagha Lami, Ramesh Kumar (2022) Assessing the Comparative Advantage of Malaysia in the Agri- Food Industry. [Final Year Project Report] (Unpublished)

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Abstract

This study aims to provide an extensive analysis of Malaysia's comparative advantage in the agri-food industry from year 1991 till year 2013. The Comtrade UN database was used to derive yearly agri-food statistics. E views software and excel worksheet was used for calculations where the 176 commodities varying of 20 different categories of agri food products are analysed. The methodology used are empirical models of RCA, Panel Data Regression Analysis, Pooled Ordinary Least Square Model (OLS), Fixed Effect Model (FEM), Random Effect Model (REM), and Hausman Test. The findings show that from Relative Export Advantage and Relative Import Advantage had comparative advantage of 25.56% and 93.75% respectively The Relative Trade Advantage (RTA) and Revealed Competitiveness (RC) calculations also showed that 51.14% had RTA and RC with competitive advantage. It is also found that, inflation, GDP and FDI has a negative relationship towards the RCA that were analysed. The policy recommendations include increase in subsidies and investment opportunities as well as research and development in the agricultural industry.

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