Exploring the potential for enhancing export of agricultural products of Lithuanian origin

Mangirdas Morkūnas

doi:10.33605/croma-012018-002

Abstract

Purpose – the main purpose of this scientific paper is to reveal the potential of agricultural products of Lithuanian origin to compete in ever-growing international market for Western style food. Design/methodology/approach –The methods of research employed are as follows: analysis of a scientific literature, analysis of a statistical data, correlation analysis and small sample interview. Findings – International trade in agricultural products is one of the most competitive sectors of national economy providing a substantial surplus to foreign payments balance. One of potential export facilitators of agricultural products of Lithuanian origin are businessman, engaged in re-export of agricultural products from Lithuania. The ability of Lithuanina agricultural producers to sell their production in the World market is lower than in other similar EU countries. Research limitations/implications – the research provides insights, on how it could be possible to facilitate export of agricultural products of Lithuanian origin. In order to get clear directions what steps should be taken, there is a need for further researches. Practical implications - new approach of increasing export of agricultural products of Lithuanian origin is presented. Originality/Value – The paper provides new insights on Lithuanian international trade in agricultural products. Keywords: intra-industry trade, export, agricultural products, Lithuania. Research type: viewpoint. JEL classification: F14 - Empirical Studies of Trade.

Highlights

The agricultural sector plays a key role both with respect to its main function, which is to secure food security, and with respect to the non-production functions it serves in the economy and in society
As stated in the scientific literature, intraindustry trade helps to "smooth out" the differences in competitiveness between trading countries and helps to better integrate them into world economy (Kösekahyaoğlu, 2015). This creates another advantage for international trade in agricultural products of Lithuanian origin if we compare it with other products of Lithuanian origin, whose exports usually fall under classification as inter-industry trade
Trying to figure out, which agricultural products of Lithuanian origin has the biggest potential to be exported abroad, or which product groups of agricultural products would find its niche in international market more than others, we applied statistical analysis of data about Lithuanian export, used correlation analysis between different agricultural product groups of Lithuanian origin and asked a businessman, engaged in international trade of agricultural products to comment on our results and to provide additional insights

Summary

Introduction

The agricultural sector plays a key role both with respect to its main function, which is to secure food security, and with respect to the non-production functions it serves in the economy and in society. Earlier researches in intra-industry trade were focused in revealing the importance of naturally occurring oligopolies and not very deep product differentiation (Shaked, Sutton, 1984) This view left emerging economies with not very bright perspectives, stating, that lower income country specializing in lower quality products, higher income specializing of quality products, this leading to ever growing gap between developed and emerging world. It is noteworthy that biggest part of scientific trade theories dealing with intra-industry trade are focused on industrial end-user products, so researches on intra-industry trade in agricultural products are lacking Because of this reason, based on intra-industry trade parallel with industrial goods and on smooth adjustment hypothesis we can presume, that intra-industry trade is less disruptive to country than inter-industry trade because the adjustment costs take place as a result of any change in the economy such as trade liberalization (Rasekhi, Shodjae, 2012). This creates another advantage for international trade in agricultural products of Lithuanian origin if we compare it with other products of Lithuanian origin, whose exports usually fall under classification as inter-industry trade

Research methodology

Findings

Conclusions