Competitiveness and Innovations in Foreign Trade: a Case of Apples from Slovakia to Czechia

Abstract

Competitiveness and innovation are critical elements for enhancing and developing successful and mutually beneficial foreign trade. This paper deals with the concept of competitiveness at the sectoral level, narrowing it down to agriculture and food production. It focuses on the apple market and compares the competitiveness in this sector from 2004 to 2020. Specifically, the research concentrates on the case of apple trading between Czechia and Slovakia just after both countries joined the EU in 2004. It becomes clear that the ability to compete in international and domestic markets depends on comparative advantages. Therefore, the business data is used to better understand comparative advantages by using business-based measures of competitiveness for the agri-food sector in Slovakia. The data used in this article originate from the Statistical Office of the European Communities (Eurostat). This research aims to identify changes in the foreign trade of apples (080810) in Slovakia and Czechia for the last sixteen years. The agricultural trade development after the accession of Slovakia and Czechia to the EU could show positive and negative trends. Both for Slovakia and Czechia, the production of apples does not cover consumption. Therefore, importing this commodity to both countries is necessary, and the benefits from foreign trade are desirable. The study findings showed that both countries do not achieve a comparative advantage in the apple trade. Therefore, more innovations might be required to enhance competitiveness and saturate both countries' markets with apples. Relevant stakeholders and policy-makers should take the required steps to improve the situation and enhance competitiveness in this market to increase the outcomes and benefits for both countries.