An Approach of Reducing Overall Level of Export Fluctuations of the Export-oriented Countries

Huiwen Ma (Guang Dong Polytechnic of Science and Trade, Department of Economic Management, Guangzhou 510631, China)
Yiming Cai (South China Normal University, School of Economics and Management, Higher Education Mega Center, Guangzhou 510006, China)

Article ID: 1897



Overall level of export fluctuations of the export-oriented countries with rising export volume partly stem from the market failure caused by free choice of export enterprises, some government intervention thus may be necessary. To reduce the level of fluctuations of the export growth rates in these countries, this paper, taking the significant differences of the exports among various markets into account and thus using a new index named relative variance to measure the export volatility risks, proposes a model of merchandise market portfolio, a modified version of Markowitz model, available to provide explicit guidelines for the firms, the industries and even the whole country to optimize the structure of their export markets. An application of this model to the case of China's apple is then discussed. The results show that the market share of China’s apple in 7 sub-markets should be redistributed drastically.


Export-oriented country; Relative variance; Markowitz model; Export market portfolio model

Full Text:



[1] Adams, F.G., J.R. Behrman. Commodity Exports and Economic Development, Econometric Studies, 1982(28): 23-45.

[2] Board, J., T. Sinclair, C. Sutcliffe. A portfolio approach to regional tourism. Built Environment, 1987, 13(2): 124-137.

[3] Board, J., C. Sutcliffe. Risk and income tradeoffs in regional policy: A portfolio theoretic approach. Journal of Regional Science, 1991, 32(2): 191-210.

[4] Y. M. Cai, B Luo, X. Q. Ming. The optimization of the geographical direction of China’s commodity export under the background of Sino-US trade friction. Journal of South China normal University (Social Science Edition), 2019, 51(2): 93-98.

[5] Guoqiang Cheng. China agricultural exports: growth, structure and contribution, Management World, 2004, 11: 85-96.

[6] Hirsch, S., B. Lev. Stabilization Through Export Diversification. Review of Economics and Statistics, 1971, 53(3): 270-277.

[7] S. Jang, M-H. Chen. Financial portfolio approach to optimal tourist market portfolioes. Tourism Management, 2008, 29: 761-770.

[8] Junping Jia, Xiaoqun He, Yong Jin. Statistics. Beijing: Renmin University of China press, 2000.

[9] Kennedy, V.. Risk management in the Irish tourism industry: the contribution of a portfolio investment approach. Tourism Management, 1998(2): 119-126.

[10] N.Q. Liu, J. Dai. The optimization path of China’s export geographical direction to Asian market. China Business and Market, 2015(7): 95-101.

[11] J. Love. Export instability in less developed countries: consequences and causes. Journal of Economic Studies, 1987(14): 3-80.

[12] X.D. Ma, Y.S. Wang. The belt and road construction and new development of China’s export market diversification. Journal of the Party School of Central Committee of the CPC, 2017(2): 27-36.

[13] Markowitz, H.M.. Portfolio selection. Journal of Finance, 1952, 7(1): 77-91.

[14] Markowitz, H.M.. Portfolio selection: efficient diversification of investments. New York: Wiley Press, 1959.

[15] Massell, B.F.. Export concentration and export earnings: a cross-section analysis. American Economic Review, 1964, 54(2): 47-63.

[16] Massell, B.F.. Export instability and economic structure”, American Economic Review, 1970, 60(4): 618- 630.

[17] Neto, N., Romeu, R.. Did Export Diversification Soften the Impact of the Global Financial Crisis?. IMF Working Paper, 2011.

[18] Piya, S., Kiminami, A., Yagi, H.. Evaluating the Impact of Geographic Concentration on Nepalese Agricultural Export. South Asia Economic Journal, 2010, 11(2): 207-222.

[19] Qian, G.. Assessing Product-Market Diversification of U.S. Firms. Strategic Management Journal, 1997(21): 155-174.

[20] Sarada, C., Ravisankar, T., Krishnan, M., Anandanarayan, C.. Indian Seafood Exports: Issues of Instability, Commodity Concentration and Geographical Spread. Indian Journal of Agricultural Economics, 2006, 61(2): 238-252.

[21] UNDP. Towards Human Resilience: Sustaining MDG Progress in an Age of Economic Uncertainty, Report of Bureau for Development Policy, 2011.

[22] Vannoorenberghe,G., Z. Wang, Z. Yu. Volatility and diversification of exports: Firm-level theory and evidence. European Economic Review, 2016(89): 216-247.

[23] Wei, Hao, Yeqing Ma. The regional structure of China exports. Journal of World Economy, 2006(5): 22-31.


  • There are currently no refbacks.
Copyright © 2020 Huiwen Ma, Yiming Cai

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.