Megatrend Revija (Jan 2019)
Export potential of Serbia in the EU
Abstract
The paper shows the application of the gravity panel model in the assessment of Serbia's export potential to the EU during the period 2001-2017. The Gravity Model gave effective estimates of model parameters and proved to be a suitable tool for assessing trade flows between countries on a sample of 29 countries, 28 EU members plus Serbia. The regression equation of the panel model contains a series of explanatory variables that describe the trade flows. The size of the economy (gross domestic product), the purchasing power of the population (gross domestic product per capita), and distances (measures of geographical distance between the capital cities of the states of trading partners) have measurable effects on Serbia's exports to the EU. The results of the analysis showed that the size and purchasing power of trading partners positively influence the export of goods from Serbia to the EU. Therefore, the structure of exports needs to be adapted to the demands of large economies and economies that have a high standard of living in order to increase exports in the future, on a larger scale. This research is a good basis for analyzing Serbia's export potentials.
