The impact assessment of competitiveness on export growth in Georgian mineral water sector (based on econometric model)

Abstract

Introduction. The paper analyzes the dynamics of exports of the Georgian mineral water product and identifies the reasons for the upward or downward trends. The paper assesses the methodological issues of measuring the level of competition in agri-food markets in general. The paper uses a theoretical-methodological study of the issue. Comparative statistical analysis is performed according to the foreign trade statistics. The Revealed Comparative Advantage Index (RCA) and the Relative Export Advantage Index (RXA) are calculated to assess the competitiveness of the Georgian mineral water sector using the “ex-post” method. In addition, an econometric model is constructed to substantiate the relationship between cause-effect variables. The model substantiates the impact of competitiveness weighed and estimated by “Doing Business”, „Index of Economic Freedom” rankings and the potential demand of partner countries weighted by trade shares, on the growth of Georgia's mineral water exports. Aim and tasks. The main purpose of the article is to highlight the role of product competitiveness among the factors affecting export growth, to identify the main obstacles and suggest ways to overcome them. The article also analyzes the most acute problems caused by Covid 19 in the field. There are analyzed policy and forecasts in response to the complicated economic situation created by the pandemic of the main companies of the Georgian mineral water market. Results. Based on the statistical trends, mathematical calculations and econometric model evaluations, a positive correlation between competitiveness and exports is substantiated. Also, the main points of the mineral water companies performance and state support economic policy are presented due to the pandemic situation. Taking into account the general and current problems in the sector the ways to maintain and increase the level of competitiveness of the product are identified. Conclusions. The conducted research presents the importance of the competitiveness on the export growth. Accordingly, the article proposes ways to increase the level of competition and competitiveness. Conclusions have been made on the underlying problems in the field, including those caused by Covid 19 and beyond, and recommendations for addressing these problems have been proposed. Keywords: competition, mineral water sector, export diversification, competitiveness indexes.