International Journal of Management Research and Emerging Sciences

Vol 13, No 2, June 2023, PP. 95-108

Determining Competitiveness of Pakistan Sports Goods Industry Using

Revealed Comparative Analysis

Khurrum Shahzad
School of Economics & Finance, Minhaj University Lahore Pakistan.
khurramshahzad@mul.edu.pk
Shagufta Aslam
School of Economics & Finance, Minhaj University Lahore Pakistan.
shaguftaaslam54@gmail.com
Anum Javaid*
Minhaj University, Lahore, Pakistan.

*Corresponding:anumjavaid13@outlook.com

ARTICLE INFO ABSTRACT

Article History:
Received: 21 Feb, 2023
Revised: 02 Apr, 2023
Accepted: 18 May, 2023
Available Online: 07 Jun, 2023
DOI:
https://doi.org/10.56536/ijmres.v13i2.445
Keywords:
Competitiveness, Static RCA,
Dynamic RCA, Trade Specialization,
Sports products, Inflatable balls
JEL Classification:
L67-M16
This study calculates and explains the comparative advantage of Pakistan's
sports goods industries in the international market. Static and dynamic
comparative advantage analysis differentiates this work from the previous ones
for the sports goods industry. The top ten Pakistani sports items have been
chosen for this purpose. The product positioning of these products in the
international market has also been determined. The results of this study indicate
that China and India have a strong revealed comparative advantage in festivals,
carnivals, or other forms of entertainment goods and Balls, respectively. In
contrast, the United States, Thailand, and Indonesia have a significant revealed
comparative advantage in Golf balls. China acquires a competitive position in
the global market in 9 of Pakistan's top 10 sports items for 2019. According to
dynamic revealed comparative advantage, Pakistan has the most significant
revealed comparative advantage for inflatable balls from 2005 to 2019 in the
international market, implying that Pakistan has a competitive edge in
exporting this product. The Government of Pakistan needs to prioritize and
facilitate the sports goods industry for increasing exports of this industry.”
© 2023 The authors, under a Creative Commons Attribution-Non-Commercial 4.0.

INTRODUCTION
Among the renowned industries of Pakistan, the sports goods industry enjoys its position
as a small-scale. Various sports items like sports articles, soccer balls, cricket bats and balls, tennis
balls, hockey and polo sticks, and badminton rackets are manufactured in this industry. Multifold
advantages are associated with this industry as it generates direct advantages through employment,
tax earnings for the government, and earnings from sports events. The industry also contributes to
the tourism, hospitality, textiles, and clothing sector by manufacturing sportswear, increasing the
volume of exports for Pakistan (Luiz & Fadal, 2011). Pakistan's sports goods industry exports
sports products connected to cricket, hockey, martial arts, swimming, motorbikes, and car racing
(Hussain et al., 2016). The expansion of Pakistan’s sports goods products highly relies on the
demand of foreign countries (Awan & Bhatti, 2003; Ali & Waqas, 2022).

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The sports goods industry is the primary source of foreign exchange earnings and employment for
more than twelve thousand workers and supporters of relevant industries (Hussain et al., 2016). The
increasing volume of exports of Pakistan's sports goods highly depends upon foreign countries'
demand for these sports products (Rehman et al., 2018). The top importers of Pakistan sports
products are the United States, the United Kingdom, Germany, France, Italy, Argentina, Brazil,
Mexico, Hong Kong, Spain, the Netherlands, Denmark, Canada, South Africa, Australia, the United
Arab Emirates, and Belgium. The most prominent export destinations for soccer balls are the United
States and the European Union (Naz & Bogenhold, 2020).

Pakistan's sports goods industry also maintained its status as an industrial Estate and export
processing zone, as the producers were awarded the "Annual National Exports Award" in 2006 by
the Pakistan Chamber of Commerce and Industry League. The total exports of this sector were Rs.
0.82 million at the time of the partition of the subcontinent. To improve the exports of this sector,
the Govt. of Pakistan granted easy loans and subsidies to the manufacturers. So, over time, exports
mushroomed to $141 million during 1991-92. Through 1991-96 exports of sports goods were
further increased to $ 248 million. Pakistan's sports goods industry obtained a monopolistic rank in
the Global market during the 1990s since Sialkot was considered a central market for International
brands to import their large shares of sales, such as soccer balls and soccer ball goalkeepers' gloves
(Abdi et al., 2008). However, because of increasing competition in the Global market, the
monopoly of this industry has been broken (Hassan et al., 2015).

Pakistan's sports goods industry enjoyed well-known status at the local and international levels
because of low-wage labor, different varieties of wood, and pure quality raw material (Awan &
Bhatti, 2003). A large share of exports of Pakistan’s sports goods depends on the production of
soccer balls. Pakistan has a solid background connected with the production of high-quality hand-
stitched balls. For this purpose, Sialkot, one of the main cities of Punjab, achieved a prominent
position in the International market. International brands like Reebok, Adidas, Nike, Puma,
Mizassa, and Umbro obtained a large share of their sales from Sialkot (Nawaz et al., 2017).
Pakistan, USA, China, India, Thailand, and Indonesia's sports goods industries comprised 0.95
percent, 0.39 percent, 2.51 percent, 0.13 percent, 0.32 percent, and 0.32 percent, respectively, of
the total country’s exports during 2019.

Considering the significance of this industry in Pakistan’s balance of trade and its competitiveness,
this study computes the static RCA for 2019 and the dynamic RCA for the last 15 years for
Pakistan's top ten sports items. Another primary objective of this study is to determine the product
positioning of sports products in Pakistan for better competitiveness analysis and policy
recommendations for this industry.

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LITERATURE REVIEW
Comparative advantage is the ability of a party to produce the goods and services at minimum
opportunity cost or lower marginal cost (Sinanan & Hosien, 2012). At the same time, the ability or
power of a party (an individual, a firm, a country, or a region) to generate higher production levels of
visible and non-visible goods using the same amount of resources is termed an absolute advantage. In
the international market, a country's specialization model is determined by its. While according to the
World Economic Forum (WEF, 2013) report “set of institutions, policies and factors that determine a
country’s level of productivity” is called competitiveness (Rossato et al., 2018). Two main theories of
international trade are based on comparative advantage. The first is the Ricardian theory of
international trade (1817), and the second is the Heckscher-Ohlin theory (1933).

Comparative advantage is realized because of the differences in technology among the countries, and
the same is the basic assumption of the Ricardian theory. However, the Heckscher-Ohlin theory
assumes that comparative advantage arises because of the differences in cost across the countries.
Such differences in production costs are because of the variation in prices of factors of production
across countries. In Ricardian theory, a country's comparative advantage is determined by its relative
prices, while in Heckscher-Ohlin theory, it is determined by its relative factor scarcity (Utkulu &
Seymen et al., 2004). Based upon the assumptions of imperfect competition and increasing return to
scale, a new trade theory introduced the concept of intra-industry trade as a simple general equilibrium
model of non-comparative advantage was developed by Krugman in 1979. In modern theory, the terms
of internal returns to scale and product differentiation serve as a source of comparative advantage.
Schultz (2018) and Becker (1975) presented a new theory based on the concept of Human resources,
considered the main factor of comparative advantage.

Utkulu & Seymen (2004) computed Turkey’s RCA at the sectorial level by using the seven different
RCA indices from 1990 to 2003. They analyzed that Turkey had a comparative advantage in clothing,
vegetables, Fruits, Honey, Tobacco, Sugar, Oil seeds, and textile yarn, indicating that Turkey had a
comparative advantage in only seven products out of 63 product groups. They also highlighted the
effect of the customs union procedure on these products and their comparative advantages. Mahmood
(2004, 2009) conducted an extensive RCA analysis of Pakistan’s non-agriculture sector. The RCA
index indicated Pakistan had a greater RCA in the textiles and clothing sectors. The result also showed
that these sectors faced tough competition in trade liberalization, specifically from China.

Batra & Khan (2005) computed the RCA index for India and China using Harmonized System (HS)
two-digit sector-level and HS six-digit commodity-level data. Both countries were comparable in
economic size, geographical factor, and factor endowment. The factor intensity analysis highlighted
that both countries had greater RCA in the manufacturing sector. In contrast, dynamic RCA analysis
showed that India benefited more in agriculture and allied products. Bois & Heyndels (2012) analyzed
the RCA and specialization in athletics. They computed the RCA index taking the number of entries
by a country in the 2005 IAAF rankings as an indicator. They examined that African and Caribbean
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countries have a different pattern of specialization than the whole world. The RCA index showed that
richer and highly populated countries had a comparative advantage in Athletics compared to poor and
lower populated countries. They also examined that favorable political conditions positively affected
Athletics.

Mzumara et al. (2012) calculated RCA for Southern African Development Community (SADC), using
HS six-digit level export data of individual member states and world export data for 2010. The RCA
index indicated that SADC member states had revealed comparative advantage in mixed products,
including primary and some manufactured products. Results also showed that South Africa had a
strong revealed comparative advantage in manufactured products. Sarker & Ratnasena (2014)
computed the RCA index for Canada’s wheat, beef, and pork sectors, using all input cost data for
Canada obtained from the CANSIM database from 1961-2011. Canada was found to have a
comparative advantage in the production of wheat and a comparative disadvantage in the beef and
pork sectors. Hassan et al. (2015) calculated the RCA for Pakistan and India's bilateral trade in the
sports goods sector. They also applied the Gravity Model using the time series data of Pakistan from
1988-2011. RCA index indicated that Pakistan had revealed a comparative advantage in the export of
sports goods over India.

“Shahzad (2015) utilized Balassa's (1965) Index to the RCA analysis for the Clothing and Textile
industries in Pakistan, India, and Bangladesh. Based on data from 1980, 1990, 2000, and 2010, the
first static RCA analysis, 2010, and the second dynamic RCA analysis were employed. According to
the findings, Pakistan has the greatest RCA for textiles in India and Bangladesh. According to dynamic
RCA, Pakistan has been developing a comparative advantage in textiles since 1980, although with a
diminishing percentage of textile exports. The revealed comparative advantage has been extensively
used in empirical research to explore the competitive behavior of Pakistani industries. The RCA index
(Balassa’s index) is also useful for examining the performance of exports of those industries that
currently have a comparative disadvantage but hold the potential to gain a comparative advantage in
exports over time. The index can be attained by classifying the exports with HS 6-digit products into
four broader lines of their RCAs (Mahmood, 2004; Shahzad, 2015).”

Ali et al. (2019) calculated the RCA for Bangladesh’s textiles and clothing industry among the top
five competitors in the North American market. The RCA index for textiles and clothing sectors of
Bangladesh, China, India, Cambodia, and Vietnam was computed using the world trade organization
(WTO) and word integrated trade solution (WITS) data from 1980-2017. Results showed that
Bangladesh had greater RCA than the top five North American competitors. The literature review
reveals that existing literature ignored the comparative advantage analysis of Pakistan in exports of
the sports goods sector. This study fills this gap and determines the revealed comparative advantage
of the Pakistan sports goods industry at the international level, using the revealed comparative
advantage index proposed by Balassa (1965). This study also determines this significant domestic
sector's strengths and weaknesses and recommends optimal strategies or policies to gain a good status
in the global market.
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DATA AND METHODOLOGY

Secondary data from the ITC trade map from 2005 to 2019 is utilized in this study, along
with HS 6-digit level data based on UN-COMTRADE. The duration of data is restricted to 2019 to
avoid the effect of the COVID-19 pandemic on Pakistan and Global economies. According to
Harmonized System, sports products fall under HS-95, and in the case of Pakistan, these sports
products are subdivided into 44 product classes. The top 10 Pakistan sports products have been
selected for further RCA analysis because, during the said period, these commodities were the main
exporting products of Pakistan’s sports goods industry.
Table I: Product Code and Label
SR # Product Code Product Label
1 '950662 Inflatable balls
2 '950699 Articles and equipment for sports and outdoor games
3 '950669 Balls (other than table-tennis balls, tennis balls, inflatable, and golf balls)
4 '950691 Articles and equipment for general physical exercise, gymnastics, or
athletics
5 '950659 Badminton and similar rackets, whether or not strung
6 '950651 Tennis rackets, whether or not strung
7 '950590 Festival, carnival, or other entertainment articles
8 '950490 Tables for casino games, automatic bowling alley equipment, and other
funfairs, table or parlor
9 '950790 Line fishing tackle
10 '950632 Golf balls

The revealed comparative advantage of the Top 10 Pakistan sports products is computed by using
Blassa’s index. Blassa’s index accurately analyzes the export flow and determines the country’s
important sectors. The comparative advantage is measured using Blassa’s index defined below:
𝑋𝑖,𝑗 𝑋𝑤,𝑗
RCA = 𝑋𝑖,𝑡𝑜𝑡 𝑋𝑤,𝑡𝑜𝑡

Where 𝑋𝑖.𝑗 represents the export value of product ‘j’ from the given country ‘i’ 𝑋𝑤.𝑗 reflects the
export value of product ‘j’ by the world, 𝑋𝑖.𝑡𝑜𝑡 indicates the total exports of country ‘i’ and xw,tot
represents the value of total world exports. Balassa’s index interpretation is straightforward. If the
RCA value is greater than one, it implies that the country ‘i’ has a comparative advantage in
producing the jth product. In comparison, less than one RCA value indicates that county ‘i’ has a
comparative disadvantage in producing a jth product (Kostoska & Hirttoski 2018).
The top ten sports items from Pakistan's sports goods sector were chosen for this study's static and
dynamic RCA analysis. Static RCA is concerned with 2019 and dynamic RCA based on 2016,
2017, 2018, and 2019. The average RCA of the previous three years from 2019 has been used for
dynamic analysis.1 Product positioning in this study is based on four different product groups.

1 The central idea for this classification comes from Mahmood (2004).
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Every product group reflects overtime change in the comparative advantage of a commodity and
the position of this product in the Global market.
These products groups can be explained as follows:
1) Products possess RCA>1 and RCAti - RCAavg of the previous three years from ti>0 shows
consistent improvement with time due to required social progress and tough competition in the
Global market. Such products are termed competitively positioned products.
2) All these products have RCA greater than one RCAti > 1 but show a decline in RCA value
over time, RCAti – RCAavg of previous three years of ti<0 because of tough competition and
adverse social circumstances.
3) Products having less than one RCA, RCAti<1, but this value of RCA is expected to increase
in the future. These products are termed emerging products.
These are further divided into two groups.
a) Products short of comparative advantage in the beginning but with time lean towards
comparative advantage termed as tire-I where RCAti<1 but >0.5 and RCAti – RCAavg of
previous three years from ti > 0.
b) The products have a robust comparative disadvantage over tire-I products. However,
with time they tend to move toward a comparative advantage. These products are
categorized as Emerging products Tire-II. RCAti < 0.5 and RCAti – RCAavg of previous
three years of ti>0.
4) All these products have less than one RCA and show a continuous decline in the RCA over
time, termed as weakly positioned products.
They are further categorized as:
a) Products with less than one RCA and their RCA further decrease over time are
termed weakly positioned Tire-I where RCAti<1 but RCAti ≥ 0.5 and RCAti – RCAavg of
previous three years of ti<0.
b) Products show a more significant comparative disadvantage, which does not
increase with time. RCAti < 0.5 and RCAti – RCAavg of previous three years of ti< 0.

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These products are known as weakly positioned Tire-II.

Table II: Products Positioning
Product Positioning Restrictions

Competitively Positioned • RCA𝑖(2019) > 1

Products • RCA𝑖(2019) − (RCA𝑖) 𝑎𝑣𝑒𝑟𝑎𝑔𝑒 (2016-2018) > 0

Threatened Products • RCA𝑖(2019) > 1

• RCA𝑖(2019)−(RCA𝑖) 𝑎𝑣𝑒𝑟𝑎𝑔𝑒 (20162018)<0

Tier I
Emerging Products • RCA𝑖(2019) < 1
• RCA𝑖(2019) ≥ 0.5
• RCA𝑖(2019) − (RCA𝑖) 𝑎𝑣𝑒𝑟𝑎𝑔𝑒 (2016-2018) > 0

Tier II
• RCA𝑖(2019) < 0.5
• RCA𝑖(2019) − (RCA𝑖) 𝑎𝑣𝑒𝑟𝑎𝑔𝑒 (2016-2018) > 0

Tier I
Weakly Positioned products • RCA𝑖(2019) < 1
• RCA𝑖(2019) ≥ 0.5
• RCA𝑖(2019) −(RCA𝑖) 𝑎𝑣𝑒𝑟𝑎𝑔𝑒 (2016-2018) < 0

Tier II
• RCA𝑖(2019) < 0.5
• RCA𝑖(2019)−(RCA𝑖) 𝑎𝑣𝑒𝑟𝑎𝑔𝑒 (2016-2018) < 0

RESULT AND DISCUSSION

In static analysis, this study calculates the sports product with a comparative advantage using Blassa’s
index for 2019.
Table III: RCA for Pakistan’s Top 10 sports products, 2019
Product Code Pakistan USA China India Thailand Indonesia
RCA RCA RCA RCA RCA RCA
950662 105.12 0.09 3.31 0.85 5.02 0.56
950699 3.72 0.90 2.99 0.90 0.34 0.13
950669 18.46 0.17 4.75 2.36 0.94 0.07
950691 0.34 0.96 3.86 0.10 0.05 0.09
950659 5.20 0.23 4.13 0.37 0.03 0.02
950651 11.82 0.10 1.69 0.03 0.01 0.02
950590 0.01 0.67 5.38 0.18 0.34 0.50
950490 0.03 1.41 2.65 0.22 0.01 0.01
950790 0.14 0.71 3.07 0.33 0.57 1.35
950632 0.14 2.68 0.79 0.01 6.75 4.90
Source: Authors' calculations
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The RCA index values for the top 10 Pakistan sports products are represented in Table III. Results
indicate that there are five sports products in which Pakistan has a comparative advantage, out of
which the highest RCA is for inflatable balls. In contrast, among all competitors, Indonesia has the
lowest RCA for this product category. It means that Pakistan has the strongest comparative
advantage for the production of inflatable balls relative to other competitors in 2019. Following the
USA, Thailand, and Indonesia, it is shown that there are two sports products in which these
countries have a comparative advantage. At the same time, these countries have revealed
comparative advantage in Golf balls. For this product, India has the lowest comparative advantage
among selected countries. Among all, Thailand has a very strongest position for Golf balls. China
has a prominent position among all competitors as it has a comparative advantage in Pakistan's nine
top 10 sports products. China has RCA for the Festival carnival, while Pakistan has the lowest RCA
for this product.
Finally, Pakistan enjoys a strong position in producing inflatable balls among all its competitors.
Pakistan gained the highest RCA for this product category, pursued by Thailand, China, India,
Indonesia, and USA. For inflatable balls, China and Thailand also reflect comparative advantage,
but Pakistan has a very strong RCA compared to both countries. In comparison, this product
indicates a comparative disadvantage for the USA, Indonesia, and India for 2019.

Table IV: Dynamic RCA Analysis for Pakistan

Products Name 2005 2009 2014 2019
Inflatable balls % of Total 1.1566 0.6746 0.7910 0.7174
Merchandise
RCA 142.8387 88.0100 96.1969 105.1156
Articles and equipment for % of Total 0.4722 0.1939 0.1915 0.1273
sports and outdoor games Merchandise
RCA 14.5905 6.1095 6.3440 3.7180
Balls (other than table-tennis % of Total 0.1472 0.0932 0.0627 0.0506
balls, tennis balls, inflatable Merchandise
and golf balls) RCA 54.8433 31.3404 19.8057 18.4565
Articles and equipment for % of Total 0.0007 0.0011 0.0133 0.0180
general physical exercise, Merchandise
gymnastics, or athletics RCA 0.0183 0.0275 0.3009 0.3408
Badminton and similar % of Total 0.0011 0.0046 0.0037 0.0114
rackets, whether or not strung Merchandise
RCA 0.4835 1.6601 1.4624 5.1992
Tennis rackets, whether or not % of Total 0.0008 0.0026 0.0021 0.0120
strung Merchandise
RCA 0.2873 1.1295 1.7366 11.8188
Festival, carnival, or other % of Total 0.0005 0.0035 0.0003 0.0002
entertainment articles Merchandise
RCA 0.0660 0.4818 0.0385 0.0105

Tables for casino games, % of Total 0.0027 0.0016 0.0008 0.0007

automatic bowling alley Merchandise
equipment, and other RCA 0.0303 0.0133 0.0321 0.0301
funfairs, table or parlor
Line fishing tackle % of Total 0.0011 0.0009 0.0007 0.0009
Merchandise
RCA 0.1800 0.1278 0.1205 0.1403

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Golf balls % of Total 0.0025 0.0001 0.0002 0.0005

Merchandise
RCA 0.6427 0.0314 0.0617 0.1430
Source: Authors’ Calculations

Table IV represents dynamic RCA and shares of the top 10 Pakistan sports products as a percentage
of total merchandise for Pakistan. The RCA for inflatable balls, articles, and equipment for sports,
balls, festivals, and carnivals decreased as the percentage of total merchandise decreased. These
products show a continuous decline in RCA and in the shares of exports. Electricity crises, small units
of production, lack of modern technology, lack of credit facilities, lack of investment, and security
problems in Pakistan are the main factors of this decline. They are responsible for the poor
performance of Pakistan’s sports goods industry. While on the other hand, The RCA for articles and
equipment for general physical exercise, Badminton, and Tennis rackets, whether or not strung,
improved between 2005 to 2019. The share of these products in total merchandise also increased.
These products indicate a continuous rise in the values of RCA and the share of exports. This
improvement belongs to better quality raw materials, different varieties of woods, and low-wage
skilled laborers.

In the case of tables for Casino games, the RCA remain constant from 2005 to 2019, with decreasing
share of this product as a percentage of total merchandise. It means this product reflects the stagnant
value of RCA with a declining percentage of share of exports. Among the top 10 Pakistan sports
products, there are two sports products, namely, Line Fishing and Golf balls, for which the RCA
decreased between 2005 to 2019 while the share of exports as a percentage of total merchandise has
improved. It means both products display a decrease in RCA while continuously improving the share
of exports. Pakistan has a comparative advantage in four products with decreasing RCA and
decreasing share of exports.
While there are three sports products in which Pakistan has a comparative advantage with increasing
RCA and an increasing share of exports from 2005 to 2019. One sport product reflects constant RCA
with decreasing share of exports, while two sports products represent decreasing RCA with an
increasing share of exports.

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Table V: Pakistan’s Top 10 Sports Products Positioning Groups, 2019

HS Code

CP ✓ ---- ---- ---- ✓ ✓ ---- ---- ---- ----

TP ---- ✓ ✓ ---- ---- ---- ---- ---- ---- ----
EP (I) ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
EP(II) ---- ---- ---- ✓ ---- ---- ---- ---- ---- ----
WP(I) ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
WP(II) ---- ---- ---- ---- ---- ---- ✓ ✓ ✓ ✓
Source: International Trade Center (ITC), Calculation based on UNCOMTRADE database.
Note: CP=Competitive Positioned Product; TP= Threatened Product; EM (TI) = Emerging Product Tier I; EM (TII) = Emerging
Product Tier II; WP (TI) = Weakly Positioned Product (TI); WP (TII) = Weakly Positioned Product (TII).
Note: A tick mentions the existence of a selected product in a specific product positioning group.

The difference in values between the static RCA for 2019 and, similarly, the previous three years
(2016, 2017, and 2018) represent information in Table V, and Table VI displays the product
positioning groups for Pakistan. The real purpose of this analysis is to highlight the particular
product group for which Pakistan has a competitively strong position at the global level. There are
three groups of products, such as 950662, 950659, and 950651 falling under the head of
competitively positioned products as per criteria; these products have RCA greater than one as well
as they also indicate a positive difference value for the year 2016 to 2018 and 2019. Regarding the
criteria of threatened products, there are two sports products, 950699 and 950669, under this
umbrella, as these products show negative difference values for the years 2016 to 2018 and 2019
with greater than one value of RCA.
Table VI: Difference Values between the Static RCA
2018 𝑅𝐶𝐴
Code Product label
2019 − 𝑅𝐶𝐴 𝑥𝑖/
𝑡=2016
'950662 Inflatable balls 7.36
'950699 Articles and equipment for sports and outdoor games -0.78
'950669 Balls (other than table-tennis balls, tennis balls, inflatable, and -1.35
golf balls)
'950691 Articles and equipment for general physical exercise, 0.06
gymnastics, or athletics
'950659 Badminton and similar rackets, whether or not strung 1.76
'950651 Tennis rackets, whether or not strung 7.13
'950590 Festival, carnival, or other entertainment articles -0.01
'950490 Tables for casino games, automatic bowling alley equipment, -0.01
and other funfairs, table or parlor
'950790 Line fishing tackle -0.07
'950632 Golf balls -0.01
Source: Authors’ Calculations

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The difference in values between the static RCA for 2019 and, similarly, the previous three years
(2016, 2017, and 2018) represent information in Table V, and Table VI displays the product
positioning groups for Pakistan. The real purpose of this analysis is to highlight the particular
product group for which Pakistan has a competitively strong position at the global level. There are
three groups of products, such as 950662, 950659, and 950651 falling under the head of
competitively positioned products as per criteria; these products have RCA greater than one as well
as they also indicate a positive difference value for the year 2016 to 2018 and 2019. Regarding the
criteria of threatened products, there are two sports products, 950699 and 950669, under this
umbrella. These products show negative difference values for 2016 to 2018 and 2019 with greater
than one value of RCA.
One sports product, such as 950691, an emerging tire-II, has an RCA value of less than 0.5 and a
positive difference value for 2016 to 2018 and 2019, while no product falls under the head of
emerging product tire-I. Four sports products are classified as weakly positioned tire-II 950590,
950490, 950790, and 950632 as these products have RCA values less than 0.5 and negative
difference values for 2019 and the previous three years 2016, 2017, and 2018.

CONCLUSION AND POLICY IMPLICATION

The status of the Pakistan sports goods industry in comparison with its competitors like the
USA, China, India, Thailand, and Indonesia are examined in this research. The static and dynamic
RCA at the 6-digit level of HS classification are computed. The static RCA analysis is based on 2019,
while the dynamic analysis is conducted for 2016, 2017, 2018, and 2019. For this purpose, the average
RCA of the previous three years from 2019 has been taken and utilized. Both analyses indicate that
Pakistan has a comparative advantage in five sports products out of the Top 10 Pakistan sports
products. At the same time, the strongest revealed comparative advantage in a single product group,
namely, inflatable balls. Product positioning analysis is also conducted in this study to inspect those
products for which Pakistan attains a competitive status in the International market. All selected
products are further divided into four different product groups following the profile of their relative
RCA to examine the competitive position of Pakistan. Results show that Pakistan enjoys a competitive
position in the Global market for three products, two sports products are categorized as threatened
products, and one as an emerging product, tire-II. In comparison, the remaining four products lie under
the umbrella of weakly positioned tire II.

Dynamic RCA analysis predicts that three sports products reflect improvement in RCA, and one
product RCA remains constant. In comparison, the remaining six sports products indicate a
continuous decline in RCA for the said period. Findings highlight that Pakistan’s sports goods
industry policymakers and Govt. of Pakistan increase the exports of sports goods through; modern
technology, improved quality of products with creative ideas from local consultants, by launching
training and skills programs for workers.

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The following are other factors to increase the exports of sports goods:

• Invitations to the foreign experts and trainers for the local exporters
• Arrangements of International tours for local exporters
• Provision of essential facilities to the workers of the industry
• Strategizing a good marketing plan for the re-recognition of Pakistan as a name for sports
goods
• Provision of credit and loan facilities to producers and manufacturers.

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