Abstract

General Background: The export potential of economic sectors plays a crucial role in assessing the competitiveness of enterprises in the global market. Specific Background: Current methodologies for evaluating export potential are divided into simple quantitative and complex multi-criteria methods, each with distinct advantages and challenges. Knowledge Gap: However, no existing approach fully integrates the various factors influencing exports with the outcomes of export activities, and production characteristics are often overlooked in the evaluation process. Aims: This study aims to improve the theoretical and methodological approach to assessing the export potential of economic sectors, using the Khorezm region's enterprises as a case study. Results: The findings suggest that products may face significant limitations, which could either hinder or facilitate their entry into foreign markets, depending on the identified constraints. Novelty: The article proposes a comprehensive framework that combines statistical research, comparative analysis, and systematic methods to enhance the assessment of export potential. Implications: The study offers practical recommendations for policymakers and enterprises, emphasizing the need for more integrated approaches that account for both quantitative and qualitative factors in export potential evaluations.

Highlights:

1. Methods: Quantitative and expert-based approaches for export potential assessment.

2. Framework: Combines statistical and systematic analysis for improved evaluation.

3. Gap: Overlooks production features in export potential assessments.

Keywords: Export potential, comparative assessment, economic sectors, methodology, international market

Introduction

At present, the study of the impact of integration processes on the economic development of the Republic of Uzbekistan, in particular on export potential, and especially the assessment of these processes is becoming important. This is due to the fact that at the moment there is no unified consensus on the definition of export potential. The formation of the content of this economic category requires researchers to pay special attention to the aspects of export potential that are of the greatest importance and opportunities.

Literature Review

In this context, N.M. Piret emphasizes the ability of the enterprise to produce competitive products [1].

S.I. Doroguntsov believes that the export potential is best reflected in the volume of exported goods and services [2].

According to S.V. Fomishin , the export potential includes a set of resources that can be used to develop the country's foreign economic relations [3].

M.A. Dudchenko considers the export potential in the context of systemic relations [4]. In our opinion, the export potential of an enterprise is the ability of an economic entity to supply goods or services in demand in these markets to foreign markets, while the basis of this ability is the company's specific advantages, such as resource, economic, technological, innovative and others [4].

The problem of analyzing and assessing the level of an enterprise's export potential has been studied by a number of researchers, as a result of which various theoretical and methodological approaches have been developed, each of which has its own characteristics and characteristics. In general, depending on the level of complexity, methods for assessing export potential can be divided into simple quantitative and complex multi—criteria methods, and by units of measurement - into quantitative and expert methods. Quantitative methods work with fractions, monetary values, and percentage units [5].

Expert methods involve the involvement of experts and specialists in the scoring and rating process. In our opinion, among the many existing methods, the approach of E.V. Volkodavova deserves attention, as well as the methodology of the indicator system developed by Belarusian scientists S.V. Dubkov and O.A. Shestakova [6]. Let's take a closer look at them. According to E.V. Volkodavova's method, the quantitative assessment of the export potential (E_p) is determined by summing up all the components of an enterprise's exports in monetary terms:

Figure 1.

Methdos

To shed light on the state of comparative assessment of the export potential of economic sectors, its advantages, and issues of improving the theoretical and methodological approach to the methodology, we effectively used such methods as statistical research, comparative analysis of literature and methods of hypothesis substantiation, comparative analysis, systematic and logical approach [6].

Result and Discussion

In the contemporary world, foreign economic activity is an essential component of the global economy. The liberalisation of international trade provides firms with the opportunity to engage in foreign economic activities without restrictions. The globalisation of the economy results in intense competition for several firms inside the domestic market. Seeking to fortify their position, they extend their reach outside the domestic market. At present, international commercial interactions are integral to the operational activities of firms [7].

Companies exhibit a heightened interest in engaging in economic, industrial, scientific, and technological collaboration with international partners. This presents a chance for international collaboration in production, which subsequently influences corporate efficiency and enhances competitiveness. To enhance an enterprise's efficiency, it is essential to consider all its capabilities, including its export potential. This potential encompasses all opportunities for the manufacturing of competitive products and their commercialisation in international markets [8].

In contemporary circumstances, only organisations that obtain timely knowledge regarding their external and internal environments can progress effectively; hence, assessing an enterprise's export potential has become both urgent and significant. This necessitates novel methodologies for assessing export potential and, consequently, the enterprise's competitiveness [8].

The advancement of external relations and intense rivalry in global markets underscore that the efficient utilisation of export potential is fundamental for the sustained development of the firm. It is essential to identify aspects that differentiate foreign economic activity from the domestic market and necessitate particular consideration when preparing to enter the international market: Export revenues are denominated in foreign currency, whilst production costs are incurred in national currency, rendering the corporation highly susceptible to currency changes [9].

The beneficial influence of production factors is essential for effective competitiveness, however it does not ensure success. The corporation must manufacture high-quality items that maintain stable demand in the home market, possess competitive suppliers, and implement an effective strategy. Export activities enhance the influx of foreign currency, advantageous for both the enterprise and the government. The advancement of production fosters heightened competitiveness. Export enhances the operational efficiency of the firm. In summary, we recommend identifying markers for evaluating the export potential of firms (Table 1).

Table 1 in here

The approach for evaluating export potential through tabular data may be referred to as the "system of eight indicators". The formula (2) is used to calculate the indicator of the total export potential based on these indicators:

Figure 2.

The efficacy of an enterprise's global economic activity can be evaluated via its export potential, enabling the identification of chances for the expansion of foreign commerce and the success of the enterprise's operations in the international division of labour. The export potential of an organisation encompasses its comprehensive resources and capabilities for producing competitive products both in the short and long term, as well as for marketing these products and services in international markets [10].

The export potential of firms refers to their actual or projected capacity to engage in trade activities in foreign markets, influenced by internal (endogenous) and external (exogenous) elements, and defined by the aggregate of production, financial, human, and market potential. The enterprise's export potential can be enhanced by augmenting production and supply volumes, minimising production costs, and establishing services within the consumer's country. Systemic, process, and situational approaches are employed to analyse export potential and get essential information regarding reserves to enhance the effectiveness of export efforts.

O.A. Shestakova [6] employs a system of indicators to evaluate the export potential of an organisation completely, which must be synthesised into a singular integral indicator (R) through generalisation (Table 2).

Table 2 in here

Utilising the attributes of the export potential development levels of enterprises outlined in the table, we propose to ascertain the levels of export potential development through formula (3), incorporating the scale (Rm) and quality (Rq) by amalgamating the Spearman rank correlation coefficient (Ks) and the Fechner randomness (Kf):

Figure 3.

Here j - number of integral indicators (j=2). The integral indicator of the development of the export potential of an enterprise is determined by the arithmetic mean weight of the levels of scale and quality of development according to the formula:

Figure 4.

Here R - integral indicator;

Rm, Rq – indicators of the scale and quality of development, respectively, varying in the range [0;1];

g, h – the scale and weight of the quality levels of the company's export potential development, respectively (g + h = 100%).

Facilitating export activities with requisite information necessitates a thorough and comprehensive analysis of the system and its environmental interactions. The three categories of tasks possess distinct characteristics of system analysis. The initial objective of the analysis is to assess the system's effectiveness (export potential) based on its current structure. Quantitative analytical approaches (economic and statistical analysis) are employed for this objective. The synthesis task involves identifying the structure while considering the attributes of the current system to facilitate the objectives of export activities [11].

The scripting approach is employed in this instance, with the objective of the "Black Box" being to ascertain the functionality of a system with an unknown or partially understood structure, and perhaps to identify the structure of this system. In this context, it is prudent to employ expert evaluation and modelling techniques. We suggest a series of procedures to assess the magnitude and quality of the company's export potential development (Figure 1).

Figure 5.The sequence of stages of determining the scale and qualitative level of development of the export potential of the enterprise (EPE)

To ascertain export potential, a comprehensive evaluation utilising pertinent indicators and research findings should be employed, encompassing the following stages: Expert evaluation of the company's competencies; analytical evaluation of the company's export potential; development of an assessment framework for managerial decision-making; comparison of research findings and expert opinions. Expert analytical techniques are frequently employed to evaluate an enterprise's export potential [12].

Their inclusion entails the engagement of specialists to examine the issue. The initial phase entails an examination of the company's existing performance metrics to gather critical insights regarding internal and external factors hindering the entry of its products into export markets, alongside the company's foreign trade strategies, partner nations, and competitiveness levels. This entails administering a survey among the company's personnel to gather data regarding its export operations [13].

The second stage entails an evaluation of export potential utilising various indicators, specifically:

the production efficiency of export products (computed as the ratio of the domestic price cost of export products to the cost of export products);

a higher value of this indicator signifies greater justification for the production of this product type.

The proportion of innovative products, defined as the ratio of innovative products to their overall value, delineates the segment of items eligible for export to international markets.

The efficiency of export product sales, defined as the ratio of profit from export sales to production costs, indicates that a higher value signifies greater profitability in producing such products for export;

the proportion of profit from export sales relative to the total profit of the enterprise;

the profitability of export sales, which is the ratio of profit from product exports to revenue generated from those exports.

The third stage involves the execution of an information and analytical system that will include both current and archived data, providing analysis of processes and the efficacy of managerial decisions. This system is aimed at supporting informed decision-making and improving the overall efficiency of managing the company's export activities [14].

The fourth stage encompasses an evaluation of the export potential through an expert group. Conclusions are drawn based on the results of studying the company's activities and the perspectives of specialists, and the export potential is assessed. This allows you to more accurately identify the strengths and weaknesses of the company in the context of foreign economic activity and identify opportunities for improvement.

This method of evaluating export potential enables an objective assessment of the enterprise's existing condition and the identification of obstacles that impede progress its competitiveness, identify methods to address current issues, enhance the efficiency of product sales in the domestic market, and establish chances for market entry the foreign market. The main purpose of the expert assessment is to predict the development of future events. Each enterprise can enhance its export potential in two ways: by augmenting the competitiveness of existing products or by innovating new offerings and broadening the range of exported goods (commodity direction); and by exploring new markets or amplifying sales in established markets (geographical direction).

In our view, when assessing the indicators of a business's export potential, it is prudent to identify reserves, or the untapped opportunities of the enterprise. It is advisable to employ the integral method for analysing export potential due to its straightforward computation and substantial outcomes. We believe that a thorough evaluation of export potential should be conducted utilising a point system, whereby each exported product of the firm is assigned a specific amount of points. It is advisable to calculate this indicator using the following formula:

Figure 6.

The coefficients of the relationship between internal and external export potential, reflecting the current market conditions, are at growth rates of 0.3 and 0.7, respectively; with stabilization - 0.5 and 0.5; with stagnation - 0.7 and 0.3. In conclusion, the coefficient of the relationship between internal and external export potential should be equal to one.

Using the production function, it is advisable to analyze the relationship between the factors of production and the volume of production. Attempts at various combinations of production factors make it possible to increase the volume of products. This function can be described using the production network through options. It can be expressed based on data on the ratio between the labor and capital required to produce export products using this technology.

The primary capital expenditures are dictated by the equipment's operational duration over one month, whereas labour expenses are quantified in monthly working hours. At stages 4 and 5 of the sequence of stages for determining the scale and quality of the development of an enterprise's export potential (EPE) in Figure 3.1.1, we recommend using the proposed identification map for rating indicators of export potential development, shown in the table by O.A. Shestakova (Table 3).

The company can choose one of three options for the production of products planned for export. The production function describes changes in the composition of production costs. The production network data indicates that alterations in expected production volume reveal new combinations of factors. This enables the selection of the most efficient alternative utilising data from the production network. Having summarised the aforementioned theoretical and methodological methods to the comparative evaluation of the export potential of economic sectors, we will now apply them to analyse the export potential of the Khorezm region (Table 4).

The data analysis indicates that the rise in labour costs enables the company to augment the production of export goods, as evidenced by the growth trends in the amount of exported items and services during the examined years. In comparison to the base year, export profits and export potential diminished by -36.75% and 60.09%, respectively. In 2024, export earnings rose by 68.84% and export potential by 72.92% compared to 2023, amounting to 38,183 billion soums and 21,557.4 billion soums, respectively. The results indicate the necessity of adopting new technologies and upgrading fixed assets [15].

Conclusion

The conclusion is that, following an evaluation of the export potential, an organisation can derive the subsequent conclusions:

products have serious disadvantages, so their entry into the foreign market should be stopped;

products possess several limitations; nevertheless, these can be mitigated, thereby facilitating their entry into the international market;

exports are not hindered, and in the near future In the future, the product may be brought to the foreign market.

At now, no approach exists that fully accounts for the link between factors influencing exports and the outcomes of export activities. Moreover, the production features of the firm are not consistently included while assessing the efficacy of principal export positions.

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