Research report on the evaluation on Malaysian wood products to Europe- A comparative advantage perspective, in regards of recent evalutions in European forest sector

Abstract

As the growing trade in timber and wood products increasing, it has gained more attention from the main supplier in increasing the export competitiveness of timber and related products. Therefore, countries with large forest resources have an advantage in maximizing the resources in fulfilling the world demand. Given performance of Malaysia on timber exports, this study is to provide the opportunities and benefits as well as challenges facing by Malaysian exporters to penetrate the global market. This paper analyses the pattern of Malaysian export on wood and forest products (excluding furniture) to European Union by estimating the revealed comparative advantage indices. This study uses revealed comparative advantage (RCA) framework developed by Balassa (1956) to examine the export competitiveness of Malaysian wood and forest products by using data from United Nations Commodity Trade Statistics from 1999-2006. The results explain the performance of Malaysian wood exports in competing with other exporters to Europe. Based on the findings, some policy in expanding the exports and increase the comparative advantage of Malaysian wood and forest products also drawn.