EXPORT PERFORMANCE OF TAIWAN, AND ITS CAUSES, DURING THE PERIOD OF 1965 TO 1971

This is an empirical study of Taiwan's export growth from 1965 to 1971. Constant-Market-Share analysis is employed. According to this model, a country's export growth can be partitioned into two parts: (1) a part that responds to world export growth in proportion to its constant share, and (2) another part that remains--a difference between actual export growth and that which is expected based on constant shares. The first part is identified as the world trade effect and the second part as competitiveness.;Competitiveness is also calculated and investigated for each commodity and in each market. In addition to calculation, examination, and comparison of an array of commodity and market competitive effects in the conventional CMS model, technological factors (i.e., capital-labor ratio, wage per man, consumer goods ratio, skill ratio, scale economies, and product differentiation) are used to explain the variations in competitiveness among commodities and markets.;The results of this study reveal that one-third of 1,437 million U.S. dollars export growth from 1965 to 1971, was in response to the world export growth. The remaining two-thirds was due to Taiwan's export competitiveness when beginning year shares were used. The world trade effect is partitioned into world effect (25 percent), the commodity effect (25 percent), the market effect (4 percent), and the commodity-market effect (8 percent). When the final year shares were used, the world trade effect enlarged to 46 percent as competitiveness shrunk to 54 percent.;A commodity (or market) with high world trade effect and high competitiveness is defined as Group A commodity (or market), one with low world trade effect but high competitiveness as Group B, one with high world trade effect but low competitiveness as Group C, and one with low world trade effect and low competitiveness as Group D. Textiles was typical of Group A commodity. Fish was typical of Group B commodity. Nonferrous metals belonged to Group C, and crude rubber belonged to Group D. The United States was typical of Group A market, and Singapore-Malaysia-Indonesia was typical of Group A market. Korea belonged to Group C and Iran belonged to Group D.;The world trade effect also can be partitioned into a world effect, commodity effect, and market effect. In calculating these effects, an order of calculation sensitivity problem appears; that is, the commodity effect which is calculated before a market effect calculation differs from one which is calculated after a market effect calculation. Therefore, two sets of commodity effect and market effect results may be calculated depending on the arbitrary choice by a researcher of the order of calculation. This study resolves the problem by introducing a commodity-market effect into the CMS model. A set of consistent world trade effects has been obtained regardless of the order of calculation of commodity or market effect. World trade effects are calculated and investigated for each commodity and in each market.;Technological factors can explain up to 69 percent of the variation among commodity competitiveness. Competitiveness based on shares of the initial year is positively associated with low wages and a low capital-labor ratio. However, the explanatory power of low wages and a low capital-labor ratio is lower for variations in competitiveness based on shares of the final year. These results suggest that a country may enjoy economic growth through the exportation of goods whose competitiveness is based on low wages and labor intensive methods. Furthermore, it appears that in a relatively short time a country may shift toward exporting goods whose competitiveness is no longer based on those characteristics.