Analysing the export potentials of the Portuguese footwear industry by data envelopment analysis

Exports are widely believed to play a central role in economic development and firms' profitability, particularly in countries with small domestic markets. With that aim, governments and firms spend considerable resources on international promotion. Identifying the markets with the greatest potential for export growth is therefore crucial for an efficient allocation of public and private resources. In this paper, we propose a Data Envelopment Analysis framework to identify trading potentials with existing trading partner countries within an industry. To illustrate its applicability, we use data from the Portuguese footwear industry. Specifically, among the countries that currently import Portuguese footwear, we aim to identify those that have the greatest potential for increasing their imports from Portuguese footwear in terms of revenue. We further decompose this potential into price and quantity changes to provide strategic directions to the Portuguese footwear industry. For the analysis, we use panel data of 64 countries analyzed over the years 2011-2018. The results reveal that higher potentials lie among the countries of the European Economic Area. Overall, these potentials may be achieved through different price-quantity strategies. (c) 2021 Elsevier Ltd. All rights reserved.