Abstract
The business environment and entrepreneurship are important elements in the economic growth of each country. The better the business environment a given country offers, the more attractive the country is for small and large companies as well as for private entrepreneurs. A high level of business competitiveness can help a country secure economic growth, especially after overcoming a crisis such as the COVID-19 pandemic. Many institutions focus on the measurement of the business environment using indices to evaluate its quality. The main goal of the present study is to evaluate the quality of the business environment through multicriteria analysis. For the period from 2018 to 2020, the data were analysed by using seven selected indices of the weighted sum approach (WSA) and the technique for order preference by similarity to ideal solution (TOPSIS) methods. The research sample included all EU countries that joined the EU at the same time in 2004. The processing of analytical data was gradually implemented by using descriptive statistics and multicriteria evaluation methods. The methods used in the multicriteria evaluation of variants determined the rankings of the individual variants in terms of the selected criteria using entropy. We concluded that the efficiency of the business environments in Cyprus, the Czech Republic, Estonia, Hungary, Poland, Latvia, Lithuania, Slovakia and Slovenia are below the EU average. Within this group of countries, Estonia, Malta and Slovenia have seen the largest regeneration of their business environment since having joined the EU.
Highlights
Based on economic theory, the quality of the business environment is considered to be the country’s ability to provide entrepreneurs with a sufficient level of freedom and low taxes, and the country’s ability to produce products cheaply and efficiently with minimal production inputs and high labour productivity (Mankiw, 2020)
This study compares the effectiveness of countries that joined the EU at the same time and were on the same starting line in terms of sustainable economic growth
Business has an important role in the development of an economy, and the business environment reflects the quality of economic conditions and the economic direction of a country
Summary
The quality of the business environment is considered to be the country’s ability to provide entrepreneurs with a sufficient level of freedom and low taxes, and the country’s ability to produce products cheaply and efficiently with minimal production inputs and high labour productivity (Mankiw, 2020). Country governments adopt policy conclusions that have a direct and indirect impact on the business environment (Bertelli, 2016) These parameters influence the value of the quantified index, which is assigned in a particular year for the chosen country. With the help of this analysis, it is possible to evaluate the progress within the business environment from a comprehensive point of view regarding the elimination of incorrect data, data normalisation and sensitivity analysis It is in the EU’s interest to support the prosperity and economic growth of its members, among which a plan presented in 2013 for stimulating the business potential of countries was established. For the selection of the compared indices, the areas represented in the monitored data were chosen These areas are administrative burdens, business legislation, financial burdens, technological progress, education, and quality of life. The business environment is affected by the COVID-19 pandemic, so it is very important to identify the current status of the business environment and compare it with the parameters that have or will reflect the impact of COVID-19 on the competitiveness of countries
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