Abstract:
The Export and Import economic policy has both advantages and
disadvantages. In Sri Lanka, however, export and import economy led to
uiisymmetrical export portfolio which has continuously earned deficit
trade balances. The main objective of this study is to identify
international competiveness of Sri Lankan exports. Trade Balance Index
(TBI) is employed to analyze whether a country has specialization in
export (as net-exporter) or in import (as net-importer) for a specific
group of products. The research study is based on data on exports and
imports published by the United Nations Commodity Trade Statistics
Database (UN-COMTRADE) in which 3 digits SITC Revision 4 is
selected. The study focuses on 262 groups of products and the research
time frames are year 2000, 2005 and 2010. According to the findings of
the paper, several products have higher comparative advantage and
significant positive trade balance in Sri Lankan context. However, more
than 50% of products have negative trade balance even though some of
them have significant comparative advantage. Therefore, this paper
concludes that even though Sri Lanka has comparative advantage for
leading exports, it does not provide significant contribution to overcome
negative impact of comparative disadvantage and net imports products.
Key words; Comparative Advantage, Trade Balance Index.
