Exploring the Middle East as a Market for Serbia’s Defense Industry

Stanojević, Nataša (2024) Exploring the Middle East as a Market for Serbia’s Defense Industry. Ekonomika preduzeća, 72 (7-8). pp. 387-399. ISSN 0353-443X

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Abstract

The purpose of this research is to explore the Middle East as a promising market for the Serbian industry of weapons and military equipment. The first step is building the empirical model by estimating the impact of relevant economic and political factors on Serbian military exports. The model utilized annual data over the period 2010-2021. The independent variables refer to military spending and military imports of all importing partners of Serbia in this industry, standard geographical factors, and, more importantly for the targeted Middle East region, the impact of traditional political and trade relations inherited from the former Yugoslavia. The coefficients obtained show a strong influence of traditional military export ties and the total military imports of partner countries. Although post-Yugoslav Serbia has acquired new export markets in the East, and even more so in the West, the most important markets are still the countries of the Middle East and North Africa. The application of the obtained coefficients on the countries of this region indicated four groups of markets in this region, regarding combinations between high and low realized and calculated potential exports. The results indicate the special importance of the markets of Saudi Arabia, Egypt, Iraq, the UAE, and Algeria.

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