Trade Flows and Competition Categories

About TFCC

Trade Flows and Competition Categories have the task of identifying trade flows and determining whether they belong to a price or non-price (quality) group of categories with one-way trade flows.

Gehlhar & Pick (2002) introduced a method for two-way trade flows that aims to separate price and non-price (quality) competitiveness, after Bojnec & Fertő (2008) introduce two more categories, introduce categories for one-way trade flows. During the development of the software, shortcomings were identified, cases recognized by the software, and five new categories were introduced to avoid them.

Calculation method:
Trade balance	$TB_{i,j} = V^{x}_{(i,j)} - V^{m}_{(i,j)}$
Export unit value	$UV^{x}_{(i,j)} = \frac{V^{x}_{(i,j)}} {Q^{x}_{(i,j)}}$
Import unit value	$UV^{m}_{(i,j)} = \frac{V^{m}_{(i,j)}} {Q^{m}_{(i,j)}}$
Unit value difference	$UVD_{(i,j)} = UV^{x}_{(i,j)} - UV^{m}_{(i,j)}$
$\small \\ TB_{(i,j)} \:\:\:\;\: - Trade\; balance \\ V^{x}_{(i,j)} \:\:\:\;\:\:\:\:\: - Value\; of\; the\; product\; exports\; from\; a\; home\; country\; \\ V^{m}_{(i,j)} \:\:\:\;\:\:\:\:\: - Value\; of\; the\; product\; imports\; to\; the\; home\; country \\ Q^{x}_{(i,j)} \:\:\:\;\:\:\:\: - Quantities\; of\; exports \\ Q^{m}_{(i,j)} \:\:\:\;\:\:\:\: - Quantities\; of\; imports \\ UV^{x}_{(i,j)} \:\:\:\;\; - Export\; unit\; value \\ UV^{m}_{(i,j)} \:\:\:\;\; - Import\; unit\; value \\ UVD^{x}_{(i,j)} \: - Unit\; value\; difference \\$

Gehlhar & Pick (2002) introduced categories; K2, K3, K9 and K10. Bojnec & Fertő (2008) introduced one-way trade flows and they are marked by categories; K1 and K11. During the development of the software, Uzunović & Mešić introduced categories; K4, K5, K6, K7 and K8.

$\small \\ K1 \;\: - TB_{(i,j)} < 0 \;\; (or \;\; V^{x}_{(i,j)} = 0, \;\; V^{m}_{(i,j)} > 0 ) \;\; and \;\; UV^{x}_{(i,j)} = 0 \\ K2 \;\: - TB_{(i,j)} < 0 \;\; (or \;\; V^{x}_{(i,j)} < V^{m}_{(i,j)} ) \;\; and \;\; UVD^{x}_{(i,j)} < 0 \;\; (or \;\; UV^{x}_{(i,j)} > UV^{m}_{(i,j)}) \\ K3 \;\: - TB_{(i,j)} < 0 \;\; (or \;\; V^{x}_{(i,j)} < V^{m}_{(i,j)} ) \;\; and \;\; UVD^{x}_{(i,j)} > 0 \;\; (or \;\; UV^{x}_{(i,j)} > UV^{m}_{(i,j)}) \\ K4 \;\: - TB_{(i,j)} = 0 \;\; (or \;\; V^{x}_{(i,j)} = V^{m}_{(i,j)} ) \;\; and \;\; UVD^{x}_{(i,j)} < 0 \;\; (or \;\; UV^{x}_{(i,j)} < UV^{m}_{(i,j)}) \\ K5 \;\: - TB_{(i,j)} < 0 \;\; (or \;\; V^{x}_{(i,j)} < V^{m}_{(i,j)} ) \;\; and \;\; UVD^{x}_{(i,j)} = 0 \;\; (or \;\; UV^{x}_{(i,j)} = UV^{m}_{(i,j)}) \\ K6 \;\: - TB_{(i,j)} = 0 \;\; (or \;\; V^{x}_{(i,j)} = V^{m}_{(i,j)} ) \;\; and \;\; UVD^{x}_{(i,j)} = 0 \;\; (or \;\; UV^{x}_{(i,j)} = UV^{m}_{(i,j)}) \\$ $\small \\ K7 \;\: - TB_{(i,j)} > 0 \;\; (or \;\; V^{x}_{(i,j)} > V^{m}_{(i,j)} ) \;\; and \;\; UVD^{x}_{(i,j)} = 0 \;\; (or \;\; UV^{x}_{(i,j)} = UV^{m}_{(i,j)}) \\ K8 \;\: - TB_{(i,j)} = 0 \;\; (or \;\; V^{x}_{(i,j)} = V^{m}_{(i,j)} ) \;\; and \;\; UVD^{x}_{(i,j)} > 0 \;\; (or \;\; UV^{x}_{(i,j)} > UV^{m}_{(i,j)}) \\ K9 \;\: - TB_{(i,j)} > 0 \;\; (or \;\; V^{x}_{(i,j)} > V^{m}_{(i,j)} ) \;\; and \;\; UVD^{x}_{(i,j)} < 0 \;\; (or \;\; UV^{x}_{(i,j)} < UV^{m}_{(i,j)}) \\ K10 - TB_{(i,j)} > 0 \;\; (or \;\; V^{x}_{(i,j)} > V^{m}_{(i,j)} ) \;\; and \;\; UVD^{x}_{(i,j)} > 0 \;\; (or \;\; UV^{x}_{(i,j)} > UV^{m}_{(i,j)}) \\ K11 - TB_{(i,j)} > 0 \;\; (or \;\; V^{x}_{(i,j)} > 0, \;\; V^{m}_{(i,j)} = 0 ) \;\; and \;\; UV^{m}_{(i,j)} = 0 \\$

Instructions for calculation

You need to create template in order to get your results. Fill in the templates with your data. For RCA and GLIIT only data on values for imports and exports are needed, while for TFCC and CI data on values and quantities for imports and exports are required. If you filled out the template properly, you upload the document and that's it. The results will pop up in a few seconds. In case you have a huge document, please wait, it may take a minute to calculate. In case something is wrong, please make sure you have filled in the templates correctly, that you have not accidentally changed something. If everything is fine and you have a problem, write to us.

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Interpretation of results

As explained earlier, the TFCC has 11 categories that are interpreted as you can see in the table below. TFCC is colored with a blue gradient.

Interpretation of TFCC results
Category	Explanation
K1	Only import category
K2	Unsuccessful non-price competitiveness
K3	Unsuccessful price competitiveness
K4	Unsuccessful non-price competitiveness
K5	Unsuccessful non-price competitiveness
K6	Competitiveness is neither successful nor unsuccessful
K7	Successful non-price competitiveness
K8	Successful non-price competitiveness
K9	Successful price competitiveness
K10	Successful non-price competitiveness
K11	Only export category

TFCC

Trade Flows and Competition Categories

About TFCC

Instructions for calculation

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Interpretation of results

This is how many times TFCC is calculated!

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