Structural export changes for Lithuanian dairy industry

ENPurpose of the article. Export plays a key role in building more sustainable economic growth and the importance of its ability to with-stand different demand shocks is unquestionable. Despite this, export is influenced by economic policy, macroeconomic, political and other factors which come from internal and external sources. For instance, Russian government announced an embargo on dairy products on 6 August 2014 and it had huge impact for Lithuanian exporters. As a result of these restrictions, the main aim of this paper is to analyze Lithuanian dairy industry export distribution by geographical areas and to calculate export concentration degrees according to Herfindahl - Hirschman indexes before and after limitations. Methodology/methods. For the analysis we use data from the Lithuanian Department of Statistics (Statistics Lithuania) bases for the 2008-2015 years. We calculated export concentration degrees according to Herfindahl - Hirschman indexes. Scientific aim The main aim of this paper is to analyze Lithuanian dairy industry export distribution by geographical areas and to calculate export concentration degrees according to Herfindahl - Hirschman indexes before and after limitations. Findings The analysis showed that during 2008-2013 periods Lithuanian dairy industry's export was not diversified enough and concentration was considered as moderate or high. Lithuanian dairy industry export analysis in global markets revealed that approximately 56 percent of total export went to Russia and the countries economically related to it such as Latvia or Poland, also Sweden.This poses a threat to the development of export because changeable product demand is observed in Russia and various political decisions have a significant impact on export’s performance. During 2015 year, situation slightly changed and dependence on interrelated markets declined. Also trade relations with United States of America, Kazakhstan, South Korea, Saudi Arabia, Vietnam and Israel were strengthened. Thus, it can be posit that dairy industry could withstand external effects and to contribute to economic development. Conclusions. The overall analysis of structural export changes for Lithuanian dairy industry revealed that market is moderately concentrated. However, strong export concentration to Russia decreased, orientation to other global markets such as Asia, North and South America was strengthened. Thus, it can be posit that demand fluctuations in any country are not so hazardous. In order to maintain and fortify this position it is necessary to diversify export by reconsidering strategies and policies.