Theoretical basis for a method of distribution of market share changes in international trade

Abstract

Chami's method for calculating how much of an exporter's market share change can be attributed to each competitor has regularly been applied in the literature, but it has not been related to any theory yet. Here, an attempt is made to examine the trade models that can provide the theoretical foundations for the method, clarifying the assumptions underlying its results. It is shown that the method is consistent with most of the main trade models found in the literature.