Country-Specific Competitive Advantages of Manufacturing Sector Firms in Eastern EU Member States

Abstract

The article is aimed at investigating impacts of international competition related factors in firms’ external environment on their competitiveness. The question of this study is: do the factors in external environment advance or impede the competitive positions of manufacturing firms in Eastern EU countries? The character of home country environment is measured considering firms’ managers’ opinion on the following parameters: the tax rates and administration, business licensing and permits, political instability and corruption. The dependent variable representing firm's competitiveness is growth of total annual sales over the last three years. World Bank's Enterprise Surveys 2013 year data is used. Linear regression model analyzes was run to test the relationships between variables. Though evaluations of selected obstacles differ among Eastern EU member states, none statistically significant relationships were observed and thus none regression models, explaining impacts of selected external factors on firms’ competitiveness were built. It is concluded that either governmental regulations related factors do not influence firms’ competitiveness or firms’ representatives do not associate performance with the analyzed external country-specific factors. That the competitive advantages of manufacturing firms in Eastern EU countries may be based on firm specific advantages.