Product space and Thailand’s export growth and stability

Abstract

This research investigates the factors affecting Thailand’s export growth and stability at the product level. There are 3 key factors extracted from international trade data, which are the distance from Thailand to a product (distance), Product Complexity Index (PCI), the competition level of products. Distance reflects the potential of Thailand to successfully export the product base on existing capabilities. PCI informs the complexity of producing and exporting process of the product. The competition level illustrates the number of exporters and potential of being exported by other countries. We have found that the export of far products grow fast because there is room for improvement. High complexity products have high export growth if their location is not farther than 0.73. We also have found that growth and stability have an inverse relationship. Most of the high export growth products are unstable. However, at a certain distance between 0.70 to 0.73, we can find the product with a higher export growth that is relatively more stable by looking for the higher PCI products. Moreover, highly competitive products have lower export growth but higher stability. Although they have many exporters, they require only the common capabilities to be exported. Thus, their exporters are harder to fail. Finally, we found that the highest export growth products of Thailand locate at a very far distance and have low PCI. However, these products are less stable which means their exporters must take higher risk exporting them.