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Rethinking the international competitiveness of olive oil in Spain and Chile: governance of sustainable practices

Abstract:

The international competitiveness of agri-food products is crucial for the economic growth of exporting countries, which is also closely related to critical aspects of sustainable development. This research aims to comprehensively understand the factors of international competitiveness in two contrasting cases: Spain as the world’s leading exporter and Chile as an emerging exporter of olive oil. This study takes a novel approach by including the governance of sustainable practices as part of the framework for analyzing international competitiveness. A mixed research method was used: firstly, quantitative indicators were estimated to compare the levels of international competitiveness of both countries; secondly, a qualitative analysis was carried out to analyze in depth the determinants of international competitiveness based on Porter’s Diamond Model. The results show that Spain has solidified its position as the world’s leading olive oil exporter. On the other hand, Chile still has a small market share; however, it already achieved its revealed comparative advantage in 2015. The potential causes of this performance were determined by the comparative study of the determinants of the competitiveness of Porter’s diamond model; “Factor conditions”, “Demand conditions”, “Firm strategy, structure, and rivalry”, “Related and supporting industries”, “Government” and “Chance”. In addition, both countries show the adoption of sustainable practices in their exports driven by subsidy policies, informal conventions, and consumer preferences. Finally, some relevant implications for management and public policy are highlighted.