de Dios, Emmanuel S.Rahmatia2024-11-122024-11-121991-10https://selib.upd.edu.ph/etdir/handle/123456789/952This study examines the association between commodity concentration and export earnings instability. The thesis is that commodity concentration on one or a few export products as in the case or Indonesia or other developing countries contributes to export earnings instability. The study also compares the 1980-1988 export data or Indonesia with previous periods analyzed before. It also aims at extending the validation that export diversification policy has a limit or that its pursuit must be cautiously undertaken. Using the trade diversification model developed mainly by Love (1979a), which is based on the Markowitz model of portfolio analysis, the impact or diversification is investigated. The relationship between commodity concentration and export earnings instability index was determined using regression analysis as specified by Love (1986). The findings are: 1. There is a highly significant negative association between commodity concentration and export earnings instability, 2. the 1980-1988 period had a lower level of instability with a declining trend in total export earnings compared to previous periods analyzed, and 3. the diversification policy followed had limitations because it did not generate increasing export earnings as expected. The conclusion that can be derived is that trade diversification should be based on a country's dynamic comparative advantages. In the case of Indonesia, it implies a necessary improvement of its competitiveness and the expansion of its markets for exports.enThesis