The competitiveness level of Georgian mineral water and its promoting ways (ქართული მინერალური წყლების კონკურენტუნარიანობის დონე და მისი ამაღლების გზები)
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Date
2021
Journal Title
Journal ISSN
Volume Title
Publisher
Ivane Javakhishvili Tbilisi State University Press
Abstract
The article assesses the competition and competitiveness in the mineral
water sector of Georgia. Competition is analyzed according to competitiveness
indexes and factor analysis. The paper examines the peculiarities of the dynamics
of Georgian mineral water exports.
Biblio graphic research has been conducted on the issue of competition
and competitiveness. Competition in the mineral water sector is assessed by
the Concentration Index. The Herfindahl-Hirschman index (HHI) is calculated to
determine the level of monopolization of the market. Product competitiveness
is justified by calculating the Revealed Comparative Advantage Index (RCA) and
the Relative Export Advantage Index (RXA). The econometric model examines the
cause-and-effect relationship between competitiveness and exports and reveals
a positive impact.
Mineral water production is one of the leading sectors in Georgia, which
significantly contributes to the economic development of Georgia. Priority for
mineral water production is determined by a number of advantages. These are:
wealth of natural resources, lack of seasonality, low prices, high quality and, most
importantly, return on investment in a short time.
Based on the analysis of the level of competition in the Georgian mineral
water sector, it is concluded that the sector is competitive and the market is
not monopolized. The article evaluates the results of the market power of the
industry. The impact of market power on the pricing mechanism is determined. At
the same time, the most acute problems of competition are identified and modern
challenges are analyzed.
In accordance with the problems and challenges identified in the paper,
conclusions are made and recommendations are proposed. In response to the
current challenges, it is desirable for the public and private sectors to jointly
develop a common vision for export support programs. However, programs
should reflect long-term plans and not one-time benefits. It should be noted that
more diversification of mineral water export is needed.
Description
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Keywords
Competition, competitiveness, mineral waters, export diversification
Citation
Economics and Business, №1, 2021, pp. 131-151