*4.3. Standard Multiple Regression*

With the aim to identify if the perceived local food product perceptions influence the sustainable regional development the respondents are also asked to evaluate the claim: "Local food products contribute to sustainable regional development" (five-point interval scale question), which has been used as a dependent variable in the regression analysis. The data were analyzed using a multiple regression procedure, while the set of factors obtained in the factor analysis for each sample group were used as predictors. By performing the multiple regression, the authors wanted to search and explain the relationship of the independent variables to the dependent variables if those relationships prove to be linear [57–59].

Firstly, a standard multiple linear regression was performed on the consumers sample. Before the regression was performed, we tested the assumption that the independent variables are not highly correlated with each other (r = 0.7 and above) [60]. Tolerance values are greater than 0.7, and VIF (variance inflation factor) values are not greater than 10, confirming that there is no multicollinearity. Model evaluation was then undertaken. Multiple regression has been conducted to determine the best linear combination of all factors for predicting local food products contribution to sustainable regional development. The empirical level F of the distribution is 123.015 and indicates that the high value of F distribution is not accidental, and that the regression equation is applicable. This combination of variables significantly predicted LFPs' contribution to sustainable regional development, with all five variables significantly contributing to the prediction in the consumer model. The beta values are as follows: The largest coefficient indicating which independent variable has the greatest influence on the dependent variable is found in the local support factor—LS; followed by institutional challenges—ICH; intrinsic and extrinsic LFPs attributes—IPIQ; while market—MC and substitutes—SUB have a weak negative impact. The adjusted R squared value was 0.426. This indicates that 43% of the variance in LFPs' contribution to sustainable regional development was explained by the model. The beta weights, presented in Table 4, suggest that in the consumer sample the local support factor contributes the most to predicting LFPs' contribution to sustainable regional development.


**Table 4.** Standard multiple regression.

\*\* Correlation is significant at the 0.01 level (2-tailed). Source: Author's calculation.

In order to conduct a multiple regression on the producers sample, a collinearity test was performed and, when all the assumptions were met, a multiple regression was applied. The empirical level F of the distribution is 5.744. The beta values are as follows: The largest coefficient indicating which independent variable has the greatest influence on the dependent variable is found in the institutional challenges factor, followed by intrinsic and extrinsic LFPs attributes and local support factor, while the market characteristics and existence of substitutes factor has no statistically significant effect. For the producers sample, the combination of variables significantly predicted LFPs' contribution to sustainable regional development, with two variables significantly contributing to the prediction in the producers' model. The adjusted R squared value was 0.53. This indicates that 53% of the variance in LFPs contribution to sustainable regional development was explained by the model. The beta weights presented in Table 4 suggest that in the producers' sample the institutional challenges factor contributes the most to predicting LFPs' contribution to sustainable regional development.

#### **5. Discussion**

Consumers' and producers' perceptions toward local food have been analyzed according to the 30 claims which were considered as relevant to provide a basis of consumers' and producers' interconnection in this developing market. In general, a rather complementary concept was found, given the similar ranking of perceived rating scores of these aspects. From the mean scores we can see that the consumers attributed the highest mean scores to LFPs' attributes such as good taste, health, good quality followed by local community support, such as the prevention of the disappearance of local food and promotion of gastronomic culture. Similarly, the producers attributed the highest mean scores to the promotion of gastronomic culture, LFPs' attributes such as health, good quality, protection of the variety of local tastes, and good taste. The producers' mean scores are slightly higher with regard to the LFPs' contribution to support to the local community and LFPs' attributes which reflects the need for increased LFPs promotion and education of consumers on LFPs' advantages to diminish the perceptual gap.

By the means of a factor analysis, the authors have grouped the claims in several factors, such as intrinsic and extrinsic quality, local support, institutional challenges, market characteristics, and existence of substitutes. The conducted factor analysis shows that the highest percent of variance in the factor analysis model in the consumers sample is found in the first two factors, intrinsic and extrinsic LFPs attributes and support of local community. It is precisely the first group of factors that shows that consumers have a positive perception of LFPs (taste good, healthy, of good quality, with good promotion and image in the market, a satisfactory appearance and good packaging). In particular, this work adds to the findings of Megicks et al. [45] that the significant drivers of positive purchasing behavior concerning local food are being motivated also by supporting local communities, retailers, and producers. The support for local farmers and traders and desire to eat high-quality traditional products that may not be found in supermarkets may be determinants of support for local food [15]. These results also confirm the findings of Colasanti, Matts, and Hamm [61] showing that the primary motives for local schools to purchase local food were local community support.

On the other hand, the consumer perception of LFPs which denote the attribute of food safety of a local brand needs to be further explored. The existence of food safety or quality assurance is of particular importance as the consumers expect quality assured LFPs, providing them with quality validation through standardization of production, regulated storage and control as "it is believed that credence attributes such as 'food safety,' 'traceability,' 'certification,' and 'brand' should positively impact consumers' perceived utility and consumers' willingness to pay a premium" [7] (p. 21). As such, there is a clear need for government regulatory environment involving the LFPs food safety and quality assurance. Building local food systems can help local economies to grow and yet improve the overall social well-being of local communities [62]. The findings of Donald and Blay-Palmer [63] on Toronto's innovative creative-food industry (defined as SMEs locally grown, organic, specialty, or culturally appropriate food) point out the disconnection between the growth of the creative-food industry and the government regulatory regime that promotes agri-food. The authors Christensen and Phillips [64], by using four theories (social capital, conflict theory, symbolic interaction, and rational choice), have further explored the possibility to bridge the gap between local food systems and community economic development. Finally, the results confirm that the local support factor as a predictor of perceived LPFs contribution to local economic support was statistically significant in both samples (of LFPs consumers and producers). For these reasons, the local producers should be further motivated to access a potential market which offers them the opportunity to sell direct to the customer, adding value to the product, and in the future possibly widening the LFPs range. Consumers should be further educated to support local producers, possibly creating a direct link with the producer. The production of a high-quality, branded product with a geographical indication would affect the recognition of the particular area [65], increasing the income and standard of living of the producer, involving all members of the community, developing teamwork, and ultimately preventing migration to urban areas or other countries [66]. Balázs [67] emphasizes that in post-socialist contexts new emerging types

of local food systems (LFSs) can be developed through collaboration within the local food sector and the researcher can help the translation process and knowledge sharing between various stakeholders who can shape LFSs' development standards (quality criteria, advertising, logos, labels, and regional trademarks) or solve legal, production, management, and commercial difficulties. In particular, the findings of Deller et al. [10] show that local foods development should be specific to a community that addresses the needs of producers and consumers and not precisely replicable as it is tailored to a specific location. "Most municipal/local governments and community planners have only recently begun to view agricultural and food systems as an important engine of economic development and sought to link their economic development and assessment work to local food systems activities" [68] (p. 4). The local food system can contribute to local employment as labor-intensive practices involved in local production techniques are present. Authors' findings show that "local food production may create jobs as well as stimulate proportionately larger spillover impacts on the local economy than nonlocal production. The results show that profitable local food producers exist across all sales classes and market channels, signaling there are viable business models for a variety of farms and ranches to pursue within this niche" [69] (p. 2). The findings of Rossi, Johnson, and Hendrickson [70] using IMPLAN (The Impact Analysis For Planning) model, reveal that the magnitude of economic benefits from local food systems depends on the region, and survey data show that total contribution to local GDP by local food systems was greater than the contribution of conventional food systems. The research of Sharp et al. [71] on understanding the opportunities and impacts of local food and farming development indicated that successful development efforts would contribute to positive economic impacts [72]. By using a local food impact calculator that can assist local food system practitioners in estimating the economic impact of their project, the authors have investigated which other sectors in the local economy are impacted by local food operations as well as other economic and nonfinancial benefits that may occur when local food systems are expanded [73,74]. On the other hand, the authors' [75] findings that direct-to-consumer (DTC) agricultural production impacts the food services and beverage subsector show the economic linkages between local agricultural production and food retail sectors. Boys and Hughes [76] suggest that the extent to which customer willingness to pay for locally grown foods surpasses the cost advantage of non-local products will influence the future market size for local products while the economic, environmental, social, and health impacts of LFS measured by the regional economics tools may account for public or attract private investment.

### **6. Conclusions**

The results indicate that the LFPs perceptions in the samples of consumers and manufacturers have a rather analogous interpretation and, on the other hand, their mean scores slightly differ in some aspects, which has also been expected. This study, however, provides more substantive outcomes for the producers, processors, retailers, and consumers as it reveals local food products perceptions on various specificities. These include not just local food products' extrinsic and intrinsic attributes but some additional facets of demand and supply such as existence of an adequate institutional framework, improved credence attributes, and stronger brand image in order to be able to better differentiate these types of products. Interestingly, both the producers' and the consumers' perceptions on domestic LFPs, in relation to imported LFPs, are very positive as they consider domestic LFPs to be of better quality, safer, and cheaper than the imported food products, supporting the thesis that LFPs represent the potential that can contribute to the promotion of the local community. Consumers tend to pay more for the "value added" products and if the LFPs denote quality, freshness, and authenticity the local producers can in this way differentiate from large producers. The issue of trust that can be built between consumers and producers by a mutual contact shall contribute to healthier and more sustainable local community practices.

The importance of a local brand should be emphasized through targeted promotion programs. In this way consumers can be further educated on the benefits of LFPs. Branding programs that promote and identify local food products produced within the province may be a part of economic development strategies for rural communities. This is only possible if the local food producers are positioned differently from other large food producers, and if LFPs have adequate support and promotion in the framework of a rural strategy.

In the Republic of Serbia, the framework of community and economic development strategy based on LFPs is still in an early stage of development. The successful practices of local food systems in the European Union can facilitate learning and information exchange. The European countries have the support from European Agricultural Fund for Rural Development (EAFRD). The Republic of Serbia still has limited funds for rural support but has adopted rural development programs that include modernization of agricultural holdings, development of competitiveness, sector integration, innovation, market orientation, and encouragement of entrepreneurship. In order to strengthen local food system development, during the EU accession, local farmers with small farm size (well below the EU average farm size), with lack of financing, sales and marketing skills, administrative and trading cost burdens, need to have support from official bodies at regional and local level, in order to create local food systems that may have long term implications for community economic development, environmental sustainability, and nutrition. The multifaceted issue of local food products in the future could then also be reviewed from an economic perspective, such as to estimate the net economic impacts of local food systems. The research results reflect the segment of LFPs in the Republic of Serbia. As the LFPs market in the Republic of Serbia gradually develops, it is necessary to further investigate and monitor the development of this market and perhaps further investigate the willingness to pay for domestic LFPs compared to imported LFPs, and the willingness to pay higher margins for specific LFPs categories. On the other hand, it would be useful to investigate the degree of competitiveness of LFPs producers (their marketing skills, entrepreneurial skills, economic viability of financial incentives).

This research study is based only on qualitative and quantitative study of the representative sample of LFPs' consumers and producers in the Republic of Serbia, therefore its findings cannot be generalized to a wider range of developed agri-food economies, as the Republic of Serbia's local food system is in the early stage of development. This limitation of the study can point to the need to undertake further studies in comparable economies at a similar stage of local food system development.

**Author Contributions:** All authors contributed equally in the writing and reading of this paper. Conceptualization, methodology, formal analysis, and original draft preparation, S.I. and J.V.T.; investigation and resources, V.C.; supervision and project administration, D.C. All authors have read and agreed to the published version of the manuscript.

**Funding:** The paper is part of the research at the project III-46006 "Sustainable agriculture and rural development in terms of the Republic of Serbia strategic goals realization within the Danube region," financed by "the Ministry of Education, Science and Technological Development of the Republic of Serbia."

**Conflicts of Interest:** The authors declare no conflict of interest.
