Abstract
Business environment is considered to be an important factor that affects the competitiveness of the country or region. The assessment of business environment is subject to analysis realized by many national as well as internationally accepted institutions, whose outputs have usually form of composite indices reflecting the quality of the business environment. The aim of the article is to investigate the relationship between different indices of the quality of business environment on one side and selected macroeconomic indicators and country's credit rating on the other side. The analysis concentrates on the countries of Visegrad four region (V4) – Slovakia, Czech Republic, Hungary and Poland. The following indices are analyzed: Ease of Doing Business created by the World Bank Group , Global Competitiveness Index, Index of Economic Freedom, rating from The World Competitiveness Yearbook and Fragile State Index. We use the real gross domestic product, unemployment rate and inflation rate as the macroeconomic indicators and the results of the country's credit rating evaluated by Moody's, Standard & Poor's and Fitch Ratings. The analysis is based on the country level data for the 2005 – 2014 period derived from the official statistical reports of World Bank, World Economic Forum, Institute for Management Development, The Heritage Foundation, Fund for Peace and Eurostat. The analysis is performed through correlation analysis using Pearson as well as Spearman correlation coefficients. The results of our analysis indicate that relationship between different indices of the quality of business environment and selected macroeconomic indicators or country's credit rating is country specific.
Highlights
Business environment can be defined as a set of economic, legal and institutional conditions that affect the firms’ behavior in positive or negative way, but usually cannot be controlled by these firms. Demjanová (2009) describes the business environment as business conditions that promote or hinder the creation and development of enterprises
I It accelerated the process of convergence to the level of income per capita of developed Western countries (Spišáková, Pétrová, 2011).Figures 1–3 show the trends of real GDP growth rate, unemployment rate and inflation rate in V4 countries in period of 2005–2014
GDP growth rate started to grow in all V4 countries
Summary
Business environment can be defined as a set of economic, legal and institutional conditions that affect the firms’ behavior in positive or negative way, but usually cannot be controlled by these firms. Demjanová (2009) describes the business environment as business conditions that promote or hinder the creation and development of enterprises. Business environment can be defined as a set of economic, legal and institutional conditions that affect the firms’ behavior in positive or negative way, but usually cannot be controlled by these firms. The importance of a well–functioning legal and regulatory system in creating an effective market economy is widely accepted. A poor contracting and regulatory environment can raise the cost of doing business with knock–on effects to employment, output, investment, productivity, and living standards (Besley, 2015). It has been noted that the barriers to doing business vary widely across regions and countries, and it has been argued that the business environment will affect aggregate performance, as well as expert influence on the operation of financial markets (Commander, Svejnar, 2011).
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