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 12: Productivity and competitiveness in CESEE countries: a look at the key structural drivers

Dan Andrews and Alain de Serres


This chapter provides an international perspective on the productivity performance of Central, Eastern and South-Eastern European (CESEE) countries – focusing on the key drivers of knowledge and technology diffusion from ‘frontier_ firms to lagging ones – and identifies the related policy areas where the scope for improving outcomes is largest. The chapter argues that among the main drivers of diffusion, CESEE countries are found to be generally well connected in global trade flows and well integrated in global value chains. However, the performance in terms of investment in knowledge-based capital and innovation activities is more mixed, while the efficiency of resource allocation is one area where a huge gap in the performance of CESEE countries vis-à-vis best-performing Organisation for Economic Co-operation and Development (OECD) countries is found. Such an inefficient allocation of resource and weak reallocation is indicative of high barriers to firm entry and exit as well as of frictions in the mobility of labour resources across firms, sectors and regions.

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