JEL Classifications: D44, Q18
METHODOLOGICAL FEATURES OF DETERMINING THE LEVEL OF
COMPETITIVENESS IN THE AGRI-FOOD SECTOR OF GEORGIA Author: Eter Kharaishvili
| Published: 2020-12-28
| Pages: 43 - 49
For Citation: Kharaishvili E. (2020). Methodological Features of Determining the Level of Competitiveness in the Agri-Food Sector of Georgia. Globalization and Business, 10, 43-49. https://doi.org/10.35945/gb.2020.10.004
The paper evaluates the importance of scientifically calculated indicators of competition and level of competitiveness for the effective functioning of food markets, especially for Georgia. The role of these indicators for producers and consumers is also substantiated.
The methodological issues of measuring the level of competition in food markets are evaluated in the paper. The opinions of various researchers on this issue are analyzed. It is concluded that in Georgia, where the share of small enterprises is large and the import rate is high, in order to estimate the market share of small firms along with the concentration index, it is advisable to calculate the Herfindahl-Hirschman indices, as well as the entropy index and to determine the dispersion of market shares.
To provide a comprehensive assessment of the level of competition and to provide complete information to stakeholders, it is advisable to use other features as well. It is argued that determining the level of competition requires, in addition to the indices, the analysis of various competitive factors. The article evaluates five key competitive factors based on wine market analysis: local market position; Local market growth potential; Economies of scale (cost / benefit analysis); Adapting to industry change; Potential for attracting foreign investors. The obtained results are compared with the data of the research conducted by foreign scientists according to the groups of traditional and new wine producers. Comparative analysis reveals methodological problems in determining the level of competition for the agro-food sector of Georgia.
In order to successfully enter the food markets, it is advisable to calculate the level of competitiveness of the product. The level of product competitiveness in the current period is assessed by the "ex-post" method using the following indices: Revealed Competitiveness Advantage (RCA); Relative Advantages of Exports (RXA); By Relative Import Penetration (RMP); By Relative Trade Advantage (RTA). It is concluded that for Georgia, as a small country, to determine the level of competitiveness of agri-food products from two indices (RCA and RXA indices) it is recommended to use only the RCA index.
The article identifies modern methodological approaches to determining the level of competition and competitiveness, draws conclusions based on their evaluation and offers recommendations for overcoming different problems.
Competition, Agri-food Sector, Competitiveness, Competitive Factors, Competitiveness Indices
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