Good Apple, Bad Apple? How Nation Branding And Other Trade Factors Challenge Serbian Food Trade to Reinvent Itself

  • Abstract:

    The EU and the World Bank agree in their analyses that Serbia has a huge comparative advantage in the fruit and vegetable sector, even though still enormous efforts are necessary to increase productivity, competitiveness and profit. Hence, the exploitation of existing potentials remains. This study examined whether there are “hidden” trade obstacles that are observed by the Serbian fruit industry but not analysed and sufficiently discussed within research. By examining the Serbian framework conditions for producing high value and internationally competitive fruit products, a questionnaire was developed which was discussed with the Serbian direct and indirect participants of the Fruit Value Chain. Methodologically, the research work is oriented towards the Multi-strand Conversion Mixed research design as described by TEDDLIE and TASHAKKORI. With regard to their propositions, the calculations made by means of the Gravity Model were limited to the examined bilateral trade between 20 exporting and 6 importing EU countries. The analysis was able to prove that both trade-restricting and trade-facilitating influence factors are perceived within the Serbian food supply chain; factors which, in their combination, seem to be Serbia-specific. The research described within this research paper identifies five factors that significantly and highly-significantly influence the Serbian bilateral fruit trade: Transport Costs, Size of Parcells, Nation Branding, Clustering and Service Orientation. Even though further calculations with a more customized and specific data set have to be done in order to be able to analyses these implied correlations, the results confirm a surprisingly highly significant impact of a country’s national image for its fruit exports. This can be explained by the fact that food is a “confidence good” which is highly dependent on a positive association like benefits for health, a positive identification with a group or region, life style, indulgence, vacation memories, etc. Having negative associations with products therefore is especially disruptive for the food and nutrition sector. The presented findings could, on the one hand, form a basis for further, more specified and comprehensive empirical analyses and could, on the other hand, serve to support the economic integration into international markets by way of removing or correcting the above-mentioned factors.