Determinants of competitiveness of the Czech SMEs: findings from the global competitiveness project

Abstract

PurposeThe purpose of this paper is to examine the firm-level drivers of competitiveness of the Czech small- and medium-sized enterprises (SMEs) using the complex firm-level competitiveness index. The authors explored the relationship between firm competitiveness and firm characteristics such as size, age, industry affiliation and location.Design/methodology/approachThe complex competitiveness index as a proxy for firm competitiveness was calculated from the survey data. In total, 132 complete questionnaires filled in by representatives of randomly selected Czech SMEs were collected in 2018. Additional firm characteristics (size, age, industry affiliation and location) considered as determinants of competitiveness were obtained from the commercial database Albertina and from the Czech Statistical Office. The determinants of competitiveness were tested econometrically by estimation of multivariate regression models.FindingsThe authors mainly found a significant relationship between the firm size and competitiveness of the Czech SMEs. The authors have also confirmed that the least competitive enterprises are those operating in the agricultural sector and that regional location plays an important role in the determination of firm competitiveness.Practical implicationsThe identification of competitiveness drivers can provide entrepreneurs, managers and policymakers with important implications. It seems beneficial for the Czech SMEs to expand the scope of operations to achieve a larger company size, for example, by focussing on investment activities, direct marketing, improving entrepreneurial skills or by applying an aggressive sales strategy, especially towards markets with lower competition. Politicians may respond to these efforts by setting the appropriate policies that promote SMEs’ competitiveness, for example, through the hard and soft public support for financial and human resources.Originality/valueAlthough many studies on competitiveness have been published, there is still a limited number of firm-level studies looking at competitiveness from multiple angles rather than from the study of profitability and productivity. In contrast, the study uses a complex firm-level competitiveness index based on ten competitiveness pillars (technology, human capital, products, domestic market, networks, international markets, online presence, marketing, decision making and strategy) to capture the contribution of different resources and capabilities to firm competitiveness.