Export potential of Serbia`s defense industry

Stanojević, Nataša (2020) Export potential of Serbia`s defense industry. Ekonomika preduzeća, LXVIII (7-8). pp. 510-521. ISSN 0353-443X

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Abstract

This paper empirically tests an augmented gravity model of international trade in order to investigate the impact of various factors on the volume and direction of export of the Serbian defense industry. The results show that military expenditure, arms import and a dummy variable referring to historical ties in arms trade have positive effects, while, on the other hand, population, distance and degree of industrial development of partner countries have negative effects on Serbia’s military export. The study resulted in three empirical models, all with a high coefficient of determination but different statistical significance of variables. One of them was selected and applied to all export partners of the Serbian defense industry. Out of 61 countries, 21were determined as target markets based on the combination of two criteria – the trade potential index, determined by the application of the gravity model, and trade dynamics.

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