The competitiveness of a particular national economy and its business environment is critical for the country's economic, political and societal development. Competitiveness can be analyzed using a diapason of single-and multi-factor competitiveness indicators that contribute to quantification as well as and the analysis of internal and external competitiveness determinants. Suitable levels of competitiveness measurements and analyses, be they in terms of a company or a nation, are a matter of continuous debates. The authors of this paper have used econometric equations (models) in order to quantify and qualify the impact of the institutional environment, a factor represented both by the quality of governmental and regulatory measures as well as the corruption perception index. Institutional environment impact was measured in terms of export performance, as this metric represents one of the most important single-factor indicators of competitiveness. For the purposes of our research, the precise quantification of exogenous variables was not a necessity; rather we evaluated the assessment of strength and direction of relations between endogenous and exogenous variables. Our assumption was grounded in the notion that a higher quality of institutional environment is characterized by a higher level of competitiveness and lower transaction costs based on the belief that export performance is a reliable measure of competitiveness. Our research demonstrated, however, that the export performance is not a universal indicator of competitiveness, a finding that signals the need to apply other indicators, most notably, multi-factor ones.
The paper analyses some aspects of EU-China trade relations. Correlation analysis was applied to quantify the extent of the influence of the foreign trade with China on the overall foreign trade of the five members of the EU that have the largest foreign trade with China. Given the ongoing trade deficits of the EU with China, we decided to apply the Trade Complementarity Index (TCI) to determine the extent of their trade complementarity. Our initial hypothesis that the economies are highly complementary was rejected. We thus decided to apply the TCI to the EU's trade relations with the US. For the US, the TCI confirmed the existence of high trade complementarity. This implies that the EU can strengthen its negotiating power with China by increasing its trade diversification. These conclusions were also supported by our econometric model. A thorough analysis of EU-China trade relations also revealed the growth potential of the trade in services, which is gaining its momentum given the turbulences in global trade. The paper suggests that the EU needs to strengthen its trade relations with its "natural trade partners" instead of concentrating on China. The paper's focus on trade in services is a major contribution as it has so far been neglected in the economic literature.
In recent years, a decline in competitiveness and in the quality of the business environment measurements has been reflected in the Slovak Republic, as noted, for example, in the assessments of the World Bank and the World Economic Forum, as well as in the business environment index (BEI from Business Alliance of Slovakia PAS), data from which we have used in our research. A multiple regression analysis along with the correlation analysis confirmed our assumption that in the Slovak Republic a state of institutional hysteresis exists. The hysteresis effect indicates rigidity despite the economic recovery, not restoring the original balance after a certain failure in the economic process. In our case, many external environment subindeces tend to decline while macroeconomic variables (employment, value added, R&D expenditures, revenues from corporate taxes) grow. On the other hand, the internal factors of a company, through which it itself affects the environment, such as the level of liquidity or innovation, is growing. We conclude that the companies we examined have adapted. The process of improving the assessment of the country (corruption, law enforcement, equality before the law, functioning of the judiciary) will become much more expensive over time. The result of this change should be an entrepreneurial environment in which the entrepreneur does not have to deal with the ongoing optimization of taxes and levies, a condition which in the long run would lead to the economic recovery in the Slovak Republic and to improvements in competitiveness.
From the EU perspective, the Western Balkans region is considered to be an important sphere of interest with the prospect of stepwise EU accession. This is evidenced by establishing a specific accession process for these countries, including an option of granting the status of potential candidate. The progress, particularly concerning the economic preparedness and competitiveness of the Western Balkan countries, is uneven. This paper compares the readiness of particular Western Balkan countries for EU membership on the basis of accession progress assessment, as well as on the basis of international economic position assessment. Taking into account official progress reports published by the European Commission providing a comprehensive assessment of the EU membership criteria, we broaden the perspective of the economic progress assessment by employing the assessment of the international economic positions of the Western Balkan countries based on multifactor indicators. For this purpose, we developed our own composite index of international involvement. We then compared the assessment based on our own index with assessments based on both the Global Competitiveness Index and the Index of Economic Freedom. Based on our findings, the best international economic positions among the Western Balkan countries belong to the Former Yugoslav Republic of Macedonia (FYROM) and Montenegro. Therefore, it may be concluded that accession progress is accompanied by an adequate fit of these economies represented by their international economic position. Contrary to that, Serbia belongs among the worst assessed Western Balkan countries despite its advanced accession progress.
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