Boosting European Competitiveness
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Boosting European Competitiveness

The Role of CESEE Countries

Edited by Marek Belka, Ewald Nowotny, Pawel Samecki and Doris Ritzberger-Grünwald

In the global financial crisis, competitiveness gaps between Euro area countries caused additional strain. This book discusses the various dimensions of competitiveness, with a special focus on Central, Eastern and Southeastern Europe. With products becoming ever more technically sophisticated and global interconnectedness on a relentless rise, quality, customer orientation and participation in production networks are as important as relative costs and prices. For Europe to proceed with convergence and to resist global competitive pressures, policies to boost productivity and innovation are therefore vital.
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Chapter 6: Non-price components of market share gains: evidence for EU countries

Konstantīns Beņkovskis and Julia Wörz

Abstract

The authors decompose changes in market shares of 25 European Union (EU) members (excluding Belgium, Luxembourg and Croatia for data reasons) over the period 1995–2011 into various contributions relevant for the assessment of each country’s competitiveness: price factors, non-price factors, net gains from entering new markets, net pressure from additional competitors, shifts in global demand and the effects of integration into global production networks. They find a clear differentiation between Eastern EU members (which gained world market shares) and Western countries (which lost). Putting the focus on the domestic value added in global exports, they find the following. First, the vast majority of EU member states show improvements in price competitiveness over the period. Hence, apparent improvements in Central, Eastern and South-Eastern European (CESEE) non-price competitiveness based on analysing gross exports arise largely from relocating production stages into those countries. Second, the integration into global production networks seems to be beneficial mostly for the catching-up economies (Southern and Eastern EU countries) and undermines the competitiveness of more advanced economies. Third, all EU member states have profited from diversifying into new markets. Fourth, all EU member states failed to adapt swiftly to changing global demand patterns.

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