Constant Market Share Analysis of EU Exports: Tool for Analyzing the EU Competitiveness in Trade

Understanding a country's relative performance on the aspects of trade should provide a guide to its competitiveness in global markets. It offers limited insight into the main determinants of competitiveness, or of the policy levers that might be pulled to improve it what requires an analytical approach. Constant market share (CMS) analysis is frequently used in applied studies of export. CMS analysis is used to decompose changes in the European Union's (EU) share of the global market for exports into competitiveness and structural effects over 2004-2013. CMSA is used to identify and quantify competitiveness from the export data and breaks down a country's export performance into a pure competitiveness effect and a structural effect within the EU countries. The EU has experienced competitive pressures from China and other emerging economies that have resulted in a loss of global market share. Changes of a country's market share in world exports result from many interrelated factors. Therefore, the analysis of the export performance of a country should be put in perspective by analyzing long periods in order to identify trends and comparing the EU Member States.