Macroeconomic Competitiveness Research Articles

Increasing Regional Competitiveness through Project Financing

The notion that regional competitiveness can be fostered and controlled to enhance national competitiveness has gained increasing acceptance in the scientific community in recent years. Based on this, several initiatives have been developed and implemented to enhance the company’s competitiveness in specific target regions of Europe and Bulgaria through targeted project financing. This article aims to investigate and evaluate the concept of the “white field” in the competitiveness literature, as well as the influence of project financing on businesses’ competitiveness. The competitiveness of nations is a major topic in many publications. For many years, the World Economic Forum and other international organizations have developed and published country rankings based on the competitiveness index. However, the focus is on the macroeconomic (national) competitiveness context. Over the course of the last two EU program periods (2007 – 2013 and 2014 – 2020), several projects amounting to over BGN 2 billion were approved for funding under the Competitiveness Operational Program. The program is part of the EU cohesion funds and involves partial national financing. Regrettably, there is a lack of social and economic studies regarding the effects of these programs. In summarizing the author’s argument, it can be claimed that project financing in Bulgaria in recent years has failed to establish the conditions necessary to enhance business and regional competitiveness. The following sections of the article’s structure will serve to validate the thesis: The theoretical foundations explain the characteristics of various levels of competitiveness; regional competitiveness is defined, and data on the competitiveness of the municipality of Kardzhali is presented; project financing and regional competitiveness are analyzed based on project financing data in the municipality of Kardzhali. The introduction sets the stage for a discussion of the key definitions related to competitiveness and its dimensions.

COMPETITIVENESS FROM THE PERSPECTIVE OF SYNERGETIC UNITY

The article deals with the issues of synergetic unity of the concepts of competitiveness of various levels: the competitiveness of goods, enterprises and the country's economy as a whole. The pyramid of competitiveness is analyzed, the main approaches of scientists to the definition of categories of competitiveness are considered. The author's approach to interpreting the structure of the pyramid of competitiveness from the standpoint of its synergy based on certain postulates and principles, the first of which determine the synergistic structure of competitiveness, and the second the relationship of its components, which ultimately allowed the author to present a synergistic pyramid of competitiveness. Also, the article explores the institutional conditions for the formation of macroeconomic competitiveness.

Deep Ranking Analysis by Power Eigenvectors (DRAPE): Linking Sustainability and National Competitiveness

There has been limited research on integrating sustainability factors into indicators of global competitiveness among nations. Extant measures of macroeconomic competitiveness focus inadequate attention on the relative importance and interdependences among economic, social, and environmental factors and often their aggregation method. The primary objectives of this study were to explore the interrelations of economic competitiveness and sustainability while integrating the economic and sustainability performance indicators of the Global Competitiveness Index (GCI) and the Global Sustainable Competitiveness Index (GSCI) to create more accurate rankings of countries in both dimensions. Deep Ranking Analysis by Power Eigenvectors (DRAPE) with Variable Clustering (VARCLUS) was applied to associate multiple and conflicting economic and sustainable competitiveness criteria. Consequently, economic competitiveness and mainly institutional environment and innovation capabilities tend to couple with a higher degree of sustainability. However, improving and refining sustainable competitiveness may be vulnerable to environmental issues and resource scarcity, but further socio-economic dimensions must also be considered. The outcomes demonstrate the leadership of the Scandinavian countries and Switzerland, which are all competitive as well as sustainable. This research may extend and inspire further studies and government interventions that adopt more comprehensive approaches to assessing global competitiveness.

Efficiency of Mathematical Modeling of Competitiveness of a Business Organization in the Coverage of Regional Integration

The following research problem was solved in the work: what model should be used to quantify the calculation of the competitiveness of an organization's business efficiency in the scope of regional integration? In accordance with the set research task, its goal was determined. The purpose of this work was to assess the competitiveness of business in the scope of regional integration. The research sample consisted of large enterprises operating on the territory of the integration association - the EAEU. Competitiveness is now a commonly used term that can be analyzed at different levels - at the enterprise level or at the national level. Despite the fact that the purpose of this article is the competitiveness of production systems, it is appropriate to pay attention to the competitiveness of a business organization in the context of regional integration in which these systems operate. Macroeconomic competitiveness must always take into account the microeconomic context. Even the best public policy is ineffective if it is not implemented in the context of the business sector.

INSTITUTIONAL CHANGES AND DYNAMICS OF PRODUCT COMPETITIVENESS IN UKRAINE

The purpose of this article is to theoretically clarify the content of the concept of "competitiveness", to summarize the main results of institutional reforms in Ukraine, to test approaches to a more accurate macroeconomic assessment of the dynamics of competitiveness of major domestic commodity groups and technological complexity of foreign trade. Methodology. The article proposes to consider the concept of "competitiveness" as the level of compliance of goods (services) with consumer preferences of market participants. This conceptual position is used to interpret the basic competitiveness of large product groups and determine methods for its evaluation. The results of the assessment of the methodology and technique showed that in 2017-2019 the basic competitiveness of Ukrainian exports gradually increased, but in its composition the shares of certain types of raw materials and products of their shallow processing increased. At the same time, the competitiveness of consumer and investment products in the domestic market decreased and was gradually replaced by imported analogues. These trends suggest that Ukraine is selling more raw materials on international markets and producing fewer goods of higher technological sophistication with innovative or higher quality characteristics. Despite this, Ukraine's specialization in the global economy remains economically justified and effective. However, in the long run, this position of Ukraine is socially undesirable, as it holds back the development of the economy and throws it to the margins of technological progress. Practical implications. It is substantiated that, despite institutional changes, Ukraine has not approached the goal of increasing the level of competitiveness of products of high technological complexity, which have a relatively large share of added value. Value/originality. The study uses the dynamics of macroeconomic competitiveness of large commodity groups as a criterion of the effectiveness of institutional reforms in the country.

A Vector Autoregression Analysis of Foreign Direct Investment and Its Link to Competitiveness

This study has investigated the impact of foreign investments on competitiveness in Croatia in terms of macroeconomic stability conditions using data from 2002 to 2017. In this paper, we focus on the relationship between critical macroeconomic indicators and foreign direct investments (FDI) as a growth and competitiveness driving factor. To study the impact of FDI on competitiveness levels in Croatia, time series methods are used. Macroeconomic stability is a necessary but not sufficient condition for economic competitiveness. FDI can increase the level of economy’s competitiveness, although the total effect depends on the FDI structure (greenfield vs brownfield). The vector auto-regression (VAR) model and Granger causality have identified a decrease in FDI inflows in the recession period. There is a correlation between FDI, employment, GDP and exports. The goal of our study is to investigate the impact of FDI on macroeconomic indicators, FDI inflow determinants, and their impact on the overall competitiveness and growth. In this study, we identify and explain the positive and negative effects of FDI setting the framework for efficient macroeconomic policy. The results should serve policymakers in efforts to improve decisions that affect the country’s macroeconomic competitiveness. Significant differences were demonstrated in Croatia’s macroeconomic performance over the observed period. Our results show FDI as a potential inefficiency growth factor among selected indicators if it is not controlled in terms of investment structures and funding sources. The country’s competitiveness depends on stock investment, but even more on the structure of the FDI flowing in the economy.

Competitiveness through new industrialisation in the EAEU

ABSTRACT Having recently passed its first five-year anniversary, the Eurasian Economic Union is still strolling economic shallows determined by commodity dependence and deindustrialisation of postcommunist political economy. Potentially these challenges can be overcome by a new industrialisation effort targeting macroeconomic competitiveness as a comparative capacity of adapting to globalisation. Indeed, while commodity exports currently dominating the mutual trade in the EAEU bound its members by the inherited infrastructure, as well as discounts on oil and gas, manufacturing can do so through value chains, which would also require more sophistication in common economic regimes, particularly concerning technical and financial regulation. A common industrialisation agenda would be helpful here, yet to be efficient in the specific postcommunist context of the EAEU it would have to depart from the existing paradigm and get focused on managing institutional misalignment, eschewing from communist-era grandeur, upkeeping the social sector and promoting private–public partnerships in innovative manufacturing activities.

Public Debt and Economic Recovery Following the COVID-19 Pandemic

One of the main sources of funding for economic recovery in countries after the COVID-19 pandemic is the increase in public debt. But as a result of the COVID-19 pandemic and the strengthening of new trends in the development of the global economy, the level of uncertainty has greatly increased. As a result, countries that significantly increase their amount of public debt will reduce their level of macroeconomic stability considerably. The article analyses the risks that can have a negative impact on the macroeconomic stability of countries and the possibility of reducing the size of public debt during the period of economic growth after the economic recovery from the COVID-19 pandemic. The article also shows that one of the factors in deciding to increase public debt is a country's ability to significantly reduce public debt during a period of economic growth and examines the methods of financing economic recovery which will allow countries to increase their level of macroeconomic stability and international competitiveness in the medium and long term.

Competitiveness and Its Impact on Sustainability, Business Environment, and Human Development of EU (28) Countries in terms of Global Multi-Criteria Indices

In this paper, the following research problem was addressed: Is there a significant economic impact of multidimensional specified competitiveness within the EU (28) countries on the competitive business environment, human development, and sustainable growth? Based on the mentioned research problem, we formulated the aim of paper: To detect the significant interrelations among the assessment of global competitiveness, business environment as well as human development in the EU (28) countries for the period of 2006–2017. To address these problems, the methodology of global multi-criteria indices, namely the global competitiveness index (GCI), doing business index (DBI), and human development index (HDI), as well as panel analysis and non-linear regression analyses with ANOVA, were applied. The panel analysis results suggest that there is a direct linear relationship between the GCI and HDI. Moreover, the impact of the DBI on the change in the GCI score was not confirmed. We identified the main areas of countries’ interest, and important economic and statistical significant relations of competitiveness by creating three models: The GD model (constructed by GCI and DBI scores), GH model (GCI and HDI scores), and GDH model (GCI, DBI and HDI scores). Based on the results, all interrelations were confirmed. However, the highest extent of variability for the explanation of the selected data was recorded in the case of the GDH model (87.12%). We detected the impact of the business environment and human resources as competitive advantages on global macroeconomic competitiveness. As the business sector in EU (28) countries is represented mainly by small and medium-sized enterprises (SMEs), enterprise activities play a key role in the process of sustainable competitive economic development. Moreover, human resources are considered to be another important driver of the internationalization of European SMEs.

Management of Market Development of South East Europe Countries

Development management in most cases starts closer economic cooperation in order to increase GDP and welfare, which is primarily economic. Market liberalization has in fact started the integration of European states. The countries of South East Europe need to aim at for development paying particular attention to the maintenance of macroeconomic stability South East Europe need to aim at management changes paying particular attention to the maintenance of macroeconomic stability, competitiveness and cooperation with the European Union.In this work, the author wishes to emphasize the importance of development management, long-term sustainable and stable growth is the priority of every society that passes through the transition period. The focus of the paper is the management of market development, where a comparison of the situation of the three countries within the European Union is given: Croatia, Romania and Bulgaria and three candidate countries for membership of the European Union: Bosnia and Herzegovina, Serbia and Montenegro.

Use of English Language as a medium of instruction in imparting higher education at the post graduate level in India

Higher Education and its ability to enhance the quality of labour which in turn can result in increasing the competitiveness of one of the emerging economies/countries like India in terms of efficiency in producing goods and services vis-à-vis other nations has in recent years become a critical component, more so a critical parameter of various global studies that are assessing the competitiveness of nations on a regular basis. The Global Competitiveness Index 2018, The Competitiveness study of IMD World Book and the Global Talent Competitiveness Index can serve as few examples where higher education has been related with the quality of labour in any economy. Even, Management Guru Michael Porter has advocated the need of macro-economic competitiveness being one of the layers/levels of competitiveness wherein he has stressed on quality of labour as one of the key factors contributing to competitiveness of any nation. In this context the current paper makes an attempt to examine and understand the degree/level of usage of English language as a medium of instruction in imparting higher education in at the postgraduate level in India. The research methodology adopted for the paper is qualitative in nature with emphasis on collection and analysis of data from secondary sources only. Neither does the paper attempt to undertake any survey for attaining its objectives, nor does it conduct any unstructured interview of any of the experts in education industry, which may be some of the key limitations of the paper. The findings of the paper may encourage further qualitative and quantitative research on the topic of this paper focusing on different streams in which higher education at the post graduate level is offered in India. In a country with 285 affiliating universities and 390950 affiliated colleges offering several post graduate courses as per the All India Survey on Higher Education (AISHE 2017-18), the current paper may serve a relevant source of information for both the teaching and student fraternity.

The Instruments for Forecasting Budget Effects of the Tax Stimulation of Innovation Activities

The principles underlying the long-term solvency of the government through creating the necessary preconditions for the innovation-driven development of the national economy are studied. Dynamic series on change in revenues and expenditures of consolidated budget, and budget losses caused by tax exemptions over 2013–2017 in Ukraine are analyzed. It is found that the revenue shortfalls caused by the preferential taxation of company incomes are hardly predictable. A comparative analysis of the structure of budget losses caused by preferential income taxation of companies in 2014–2017 demonstrates the limited character of support for innovation activities at company level. This support could be observed only in the aircraft industry in 2014 and 2017. According to the results of the survey of innovation activities at non-innovating companies of Ukraine, performed in 2012–2014 and 2014–2016, the limited internal funds or private capital and the limited access to government assistance in innovation were significant factors discouraging companies from decisions in favor of innovation projects or innovation activities.
 The conclusion is made that the tax policy of the government, apart from seeking for stable balance of the budget, needs to create stimuli for capital formation and effective performance of companies and, consequently, the accelerated economic development. Absence of an innovation tax credit in Ukraine and appropriate instruments for assessing its budget effects has dramatic negative consequences for company performance and macroeconomic competitiveness. 
 Econometric models for tax stimulation of innovation activities at company level are constructed, enabling to select approaches to the innovation tax credit policy and the tax credit intensity, in order to enhance the potential of the national economy to develop by innovation factors. Considering the real budget capacities in Ukraine, the results of computations of budget effects of innovation tax credit (by the first or the second proposed model and by the given alternative options of tax credit amounts) can be used in selecting options of tax stimulation of innovation activities of companies.

Quantitative analysis of the competitiveness of Benelux countries

Economic competitiveness is not only a microeconomic problem for business management. It is also an important indicator of comparison among the economic development, advancement and sustainability of respective countries. The investigation of macroeconomic competitiveness of individual states is at the forefront of the discourse of both macroeconomic experts and politicians. In this study we focus on the economic competitiveness of the BENELUX countries, that is Belgium, the Netherlands and Luxemburg. The objective of the article is to identify the position of the BENELUX countries as an economic union with respect to global economy and the potential for the growth and sustainability of BENELUX economic competitiveness. The first part of the article addresses the theoretical principles of the given problematic, delineates competitiveness within its economic determinants and positions a discussion with specific focus on the BENELUX countries. The article also addresses the cooperation within the union of these states in terms of sustainability of competitiveness. The empirical part of the article analyses the competitiveness of the chosen states using standard macroeconomic methods. Three indices were utilised in the analysis, the Global Competitiveness Index (GCI), the ʻDoing Businessʼ index created by the World Bank, and the Economic Freedom Index (EFI). We have also subjected the selected indicators to a correlational analysis, the aim of which was to identify possible correlations between the chosen competitiveness index and a chosen parameter. The results of the analysis reveal the current economic position of the BENELUX countries, and outline the economic opportunities and threats to further development.

GDP Competition and Investment Allocation: Evidence from China

This study examines how macroeconomic performance competition is related to the investment allocation at firm level. We use different GDP competitions as proxies of dynamic macroeconomic condition. We find that the effect of GDP competition on fixed assets investment is significantly positive. Further, we find that adjacent-wide GDP competition is associated with more M&As and nationwide GDP competition is associated with less R&D investment in the high group of fixed assets investment. We also show that GDP competition contributes to increase overinvestment and lower underinvestment, and the GDP competition is more likely to affect the investment allocations of SOEs (State Owned Enterprises). Especially, our analyses find that the probability of promotion is lower for those provincial leaders driving firms to take more M&As to promote economic growth than investing heavily in fixed assets. We use alternative proxies to measure GDP competition and find similar results that support our inference. Our findings support the notion that GDP competition of governments distorts investment behavior and contributes to discovering and elucidating investment problems and dilemma faced by emerging economy.

The Significance of Article 122 (II) TFEU in State Debt Crisis in Europe

It was only a few weeks after the Lisbon Treaty had entered into force that the first signs of the current debt crisis became apparent. Significant macroeconomic imbalances and divergent competitiveness have been observed in the euro area during its ten years in operation. This was the first time that EMU has been called upon to manage a crisis. The response was delayed considerably for several reasons, including the absence of institutionalized crisis management mechanisms, the existence of a no-bailout clause in the Treaty, the fear of creating a precedent and the reaction of citizens in some member states. The existing legal construction of the EMU, following the Maastricht Treaty and the SGP, was one of strict stability which did not allow for emergency intervention because the prospect of such intervention would jeopardise the incentives to perform a solid budgetary and financial policy in the Member States. In this context, the provision of Art. 122 (II) constitute a crucial rule regarding the possibility of enhancing a Member State in need by EU or other Member States. According to the text of Art. 122 (II) TFEU, there are three conditions for the granting of financial assistance. Specifically, to that effect, it must be met the following conditions: a) the Member State should be in difficulties or should be seriously threatened with severe difficulties, b) these difficulties should be caused by natural disasters or exceptional occurrences and, c) these causes must be beyond the control of the Member State. The main prerequisite for granting financial assistance is the existence of threat with severe difficulties for the country in need caused by natural disasters or exceptional occurrences beyond its control. Consequently, crucial for the implementation of this provision is the question, whether the occurrence of economic downturn stemming from financial crisis, may fall within the definition of “exceptional occurrences”, under Article 122 (II) TFEU, so that it applies not only to cases of acute social problems, of engaging in foreign or military policy issues, but also in the matter of an excessive government deficit, and fiscal liquidity shortage. To some, as “exceptional occurrences” are taken to be meant economic shocks, such as serious social difficulties, unrest, foreign policy or military entanglements. It is submitted that while an excessive deficit would not per se qualify as an exceptional occurrence within the meaning of Art. 122 (II) TFEU, its transformation into a threat to sovereign solvency would not be the primary law description, since the choice for the Member State concerned would no longer be between an immediate return to budgetary rectitude or continued market lending at higher (punitive) risk premia but, rather, between borrowing at sustainable conditions and outright default.

Contemporary approaches to measuring competitiveness – the case of EU member states

Competitiveness represents a concept that has occupied a great deal of the economic theorists’ attention for decades. Due to its complexity and different perceptions, it has not been uniquely defined yet and neither has its measurement system been completely developed. The problem of the conducted research arises from the fact that the countries mostly due to structural and other constraints in the economy (or in cases where they have high levels of GDP) do not use the available inputs in the best way, i.e. they do not achieve a satisfactory level of economic efficiency, which is then reflected on the competitiveness of their economies. The aim of the research paper is to demonstrate how a combination of using Data Envelopment Analysis Method (DEA) and the Global Competitiveness Index (GCI) in ranking the countries according to the macroeconomic competitiveness is more realistic than it is in the case of using the traditional indicators. In the paper, in evaluating the competitiveness of selected EU Member States the Data Envelopment Analysis Method (DEA) is used. Based on the previous researches and our research results it is found that the traditional indicators of competitiveness are incomplete because they do not consider the macroeconomic efficiency of the country. Therefore, we propose to apply a combination of GCI and the efficiency results obtained by DEA in order to achieve a more realistic evaluation of macroeconomic competitiveness. As a key outcome of the research, the new measure of competitiveness is proposed: a combination of traditional competitiveness indicator and the results of the evaluation of countries’ macroeconomic efficiency obtained by applying BCC model of DEA method.

The causal impact of material productivity on macroeconomic competitiveness in the European Union

Interdisciplinary scholars and policy makers have claimed that increasing material productivity not only reduces environmental pressures but also improves the competitiveness of economies. This is particularly relevant in the context of the European Union (EU) since it motivates its resource efficiency and circular economy agenda by referring to this assertion. However, two limitations in the literature cast doubt on the validity of the claim. First, the literature fails to clarify the concept and measurement of macroeconomic competitiveness. Second, it lacks to take the endogeneity of material productivity into account. Addressing both shortcomings, this paper reviews the concept of macroeconomic competitiveness and identifies six conventional macroeconomic indicators to approximate it. Moreover, using panel data of the 28 member states of the EU between 2000 and 2014, the causal impact of material productivity on the six indicators is estimated, instrumenting material productivity with the number of deaths from natural hazards. The results provide evidence for a positive and causal impact of the material productivity rate on the wage rate and, with lower confidence, on the current account rate, while the remaining macroeconomic indicators are not significantly affected. Overall, these results suggest to be cautious with the claim that increasing material productivity improves macroeconomic competitiveness in the EU. Particularly the positive effect on the wage rate calls for considering possibilities to channel gains from increasing material productivity into eco-innovations to reduce the magnitude of potential rebound effects and thus environmental pressures.

Germany and Greece in the Eurozone Crisis from the Viewpoint of the Neo-Neo Debate

This study looks to analyse to what extent the neorealism versus neoliberalism debate contributes to understanding the complexity of the European Union's institutionalization, focusing on the impacts of the 2008 financial crisis and the asymmetries between Germany and Greece. How far can Greece be considered guilty for its situation and how far is Germany involved both in the cause and in the resolution of this crisis? To answer these questions, a brief analysis of the European Union's formation and of both countries' macroeconomic indicators and competitiveness is presented. The article also discusses the increasing institutionalization of the International System and the complex interdependence created within the European Union. It argues that increased European cooperation has deep-lying neorealist motivations and that the world financial regime's pandemic dynamics makes evident the asymmetrical interdependence between Germany and Greece. Economic disparities between the two nations are determinant factors in their respective behaviours prior to the 2008 crisis.

On the Soviet-American Macroeconomic Competition

The paper is devoted to the range of questions related to the competition of the Soviet and American economies in the four decades between 1950 and 1990. The author believes that the unfavorable outcome of this competition for the Soviet Union, which followed a path of catch-up development, can be explained primarily by efficiency causes. Therefore, he reveals the factors of productivity growth relying on both neoclassical and endogenous production functions. In this context, the application of an endogenous growth model makes it possible to deepen the analysis by showing the role of complex factors, including learning by doing and creativity, in macroeconomic productivity.

Marco conceptual para el diseño de una estrategia competitiva para la ciudad de Lima

La construcción de un nuevo índice de competitividad, a cargo de un equipo internacional liderado por Michael Porter, nos devuelve a un debate ya tradicional en economía entorno a las fuentes de crecimiento económico y, en general, el análisis de los factores determinantes del bienestar. Con base en los avances recientes de la teoría del crecimiento económico, Porter ha construido un esquema conceptual que explica la prosperidad a partir de tres factores genéricos: (i) la dotación de recursos, factor que incluye no sólo recursos naturales como el petróleo y el oro, sino también la ubicación geográfica y el tamaño de un país y su población; (ii) la competitividad macroeconómica, término bajo el cual se comprende a los factores que influyen sobre la productividad de las empresas, tales como la política fiscal y monetaria, la infraestructura básica y las instituciones legales; y (iii) la competitividad microeconómica, término que engloba a los factores relacionados a la estrategia empresarial y el desarrollo de los clusters, entre otros. El presente trabajo ofrece un modelo conceptual para el desarrollo de planes estratégicos a nivel territorial, basados en lo fundamental en la propuesta de Porter, de la cual hemos tomado gran parte de la sustentación conceptual, que, en principio, hemos utilizado en un diagnóstico inicial hecho para la Región de Lima Metropolitana, en el Perú.