FREE ELECTRONIC LIBRARY - Thesis, documentation, books

Pages:   || 2 | 3 |


-- [ Page 1 ] --

Milivoje Radovic, Radoje Zugic, and Nikola Milovic:





JEL Classification: O 11; O 17;

Review Received: May 08, 2012 Accepted: February 23, 2013 Abstract The competitiveness of economy has become a key term in economic trends. It is related to all strategic issues of sustainable economic development. A sure way for its preserving in unstable conditions would include increasing competition, and modernization of the economy which would lead to knowledge economy, innovations and institutional development. Knowledge and innovations also depend on development of institutions and support. This is the reason why the starting point is the hypothesis that the competitiveness of economy dominantly depends on the degree of development and the efficiency of economic institutes.

This paper considers the importance of economic institutionalization, and some elementary causes and conditions that prevented a pluralistic and even monistic performance of individual economic institutes (such as competition, market regulation, etc.) in most transition countries, and led to their objective substitution by the quasi-Institutes of sociopathological and anti-institutional nature. The primary importance pluralistic synergy of economic institutions is stressed for the development of competition. The analysis of the competitiveness in Montenegro points to urgent strengthening of institutional development factors and appropriate ambient.

Key Words: economic institutions, institutional pluralism, competitiveness, anti-institutional behavior, Montenegro.

1. Introduction In the last four decades, the competitiveness has been one of the most analyzed economic categories. The majority of authors look upon the competitiveness from the level of national economies, mentioning the improved well-being, structural changes in economy and its increasingly efficient adjusting to the international market (Bienkowski, 2006.). However, some economists (Krugman 1994, 1996) advocate an extreme attitude that the notion of competitiveness is not applicable at the level of economies, only at the level of companies. According to our opinion, it is logical that the competitiveness of economy represents summed up competitiveness of the companies in a particular country.

The theory of economics recognizes different definition of competitiveness and its importance. Some of them are:

− Internantional competitiveness as a condition in which the countries in terms of free and fair market have to produce goods and services which meet the requirements of the world market, keeping and increasing the real income of its citizens a the same time.

(OECD), University of Montenegro, Fakulty of Economics Podgorica, E-mail: rmico@ac.me Ministry of Finance, E-mail: radoje.zugic@mif.gov.me 3 University of Montenegro, Fakulty of Economics Podgorica, E-mail: nmilovic@ac.me MONTENEGRIN JOURNAL OF ECONOMICS Vol. 9, N0 1 − macro-competitiveness, as a state of competitiveness of a concrete national economy, which relates to the ability of earning higher factor incomes in terms of direct exposure to the influences of international competitiveness and − micro-competitiveness, which is relative efficiency of concrete companies to sell their products and services on a market on which both local and international competitors are present. It is based on relative prices and product quality related to the offers of other companies. The main competitiveness factors (micro-comparative advantages) there are low business costs (especially low labour cost) or a higher rate of factor productivity.

Irrespective of the given classification, all known authors agree that a period of global economic competiton has come. That dominant trend is characterized by the application of the most up-to-date knowledge, innovations and appropriate information, communication, transport and other technology, a very high mobility of production factors, real and virtual flexibility of organizational forms of associations, maximally possible openness of economy and stimulating of human capital. It includes the synergy of many microeconomic and macroeconomic factors, including: high quality management, flexible organization, maximal cost control, higher stimulation of employees for creation and innovations, advanced business strategy, pluralistically developed institutional ambient, engaged instruments of economic policy.

In early 21 century the ability of an economy to be internationally competitive is characterized by the following elements (OECD 1999): a) a higher level of innovations, a widespread usage of new, generic technologies, like information and communication technology, biotechnologies and technologies of new materials, b) a shorter product lifetime and a faster reaction to the consumers’ needs, c) a higher level of flexible automatization, through the usage of computer supported production systems, d) a higher managers’ role and highly qualified and competent workers, e) changes in the usage of new resources and materials and f) changes in the organization of industrial production like, „timely ", LEAN production, total quality control etc.

The analysis of global trade exchange trends makes possible the noticing of some general trends which contribute to the competitiveness:

− state who have the highest export rate have the highest growth rate, − the growth of global resource mobility repesents potential increase of similarity of production capacities worldwide, − technology becomes a key development factor and − knowledge and skills (human capital) become key elements of competitiveness.

The methodology of measuring of international competitiveness of a country has to, above all, take into consideration four groups of factors which influence a country’s economic

efficiency and the efficiency of its companies:

− attractiveness of the local market of a given country compard to the percentage of the penetration of its companies on foreign markets, − the importance of the local market compared to globalization, − wealth in the sense of real assets compared to processes, and − individual risk taking compared to the degree of social cohesion.

The competitive ability of economy is the result of the existence of a range of its competive advantages. The can stem from various factors, starting from socio-economic system (systm measures and mechanisms), stimulation instruments of macroeconomic policy, institutional environment, normative and legal acts and general conditions for business and entrepreneurship, through the levels of organization, management and commercial abilities ending with geographic, demographic, resource, infrastructure, innovative and microeconomic capacities

Milivoje Radovic, Radoje Zugic, and Nikola Milovic:


2. Theoretical approach The problem of competitiveness has a universal, global character. Kitson et al. (2004, p.

991) think that it has become “the natural law of modern economy.” The concept of competitiveness of economy has undergone important changes it its history. A. Smith and D. Ricardo were linking its definition with the availability of national resources.

M. Weber explained the diffrences in economic results of particular countries with particular socio-economi factors like value systems, religions etc which make up the socio-cultural capital.

J. Schumpeter stressed the importance of entrepreneurship, innovations and technology. P. Drucker has developed a concept of management as the basic competitiveness factor. R. Solow stressed the idea of education (knowledge) and technological innovations in the economic growth. M. Porter generated all the mentioned ideas into the model known as “Porterov competitive diamond.” He is a true guru of discussions on competitiveness. In his many papers (1998, 2001, 2003) he stressed the importance of export oriented clusters which represent the basis for the reaching of economic and regional competitiveness.

H. Trabold (1995) went further in theoretical considerations through the analysis of the following possibilities as competitiveness aspects: a) export, b) attraction of investments, c) adjustment of economy and d) creation and increase of available income (measured by GDP growth).

He thinks that the given aspects make up a certain hierarchy in the sense of mutual interdepending. Porter (1990, 2003) and Krugman (1994) marked productivity as the best measure of competitiveness. It can be regarded as a comparative relationship between advantages and disadvantages of particular countries measured according to some indicators and factors. By itself it has no ideal goal and it is a condition of competitive relation among states, the ability to achieve high comparative qualities of some foundations and indicators. For more than two and a half decades, thanks to Nobel Prize Winner, D. Nort (1990, p. 107) the opinion prevails that institutional factors and the competitiveness of the economy are of the biggest importance for the growth of economy.

Global business conditions impose constant challenges for the improvement of competitiveness. Swiss institutes World Economic Forum and International Institute for Management Development define competitiveness as a functional set (system) made up from institutions, transparent public policies and factors which determine the productivity level of a country. Productivity is important in the context of competitiveness because a) it shows the state of prosperity which is achieved with a high level of standard of living and b) profitability degree of the capital invested in economy, which influences a long term growth of economy and sustainable development. In that context competitiveness presents a challenge in a constant race for reaching productivity, economic prosperity and improvement of life quality.

The mentioned Swiss institutes regularly publish annual reports on world competitiveness, which show the rating of particular countries. The rating is set according to the two types of indicators: Growth Competitiveness Index, GCI and Business Competitiveness Index, BCI. The reflect macro and micro economic position of a particular country representing useful data sources about main comparative advantages and disadvantages of particular countries, according to the criteria of factor measurement which influence competitiveness and productivity of the economy.

GCI is aimed at the identifying of factors which stimulate or prevent entrepreneurship, economic growth and the development of a country’s economy. In the so-called Green Book titled „Entrepreneurship in Europe”, European Commission stressed the following dimensions of the

social importance of entrepreneurship:

it helps open new jobs and economic growth, − it has decisive importance for competitiveness, − it develops personal potentials, and − it develops general social interests.

− MONTENEGRIN JOURNAL OF ECONOMICS Vol. 9, N0 1 The notion of competitiveness includes both static and dynamic components. Some data can, however, be only considered reservedly since the sources are limited. This is why the mentioned reports can serve as a general framework for the conclusions about key reform challenges, in order to improve the competitiveness of the economy. Of course, quantitatively competitiveness of a particular country can be defined also with its participation in the world market and through the world export figures. Some experts observe competitiveness through devaluation of a national currency, the existence of certain resources and similar things. Many authors (Florida, 2002; Malecki, 2002 and others) stress the growing importance of some determinants in the analysis of competitiveness, like knowledge, learning or creativity which are the basic elements of innovations.

An interesting approach in the form of “Competitiveness tree” was created by D. Constantin and G. Banica (2007). According to their interpretation, the roots of the competitiveness consist of human resources, innovations, connections and industrial structure. The trunk is made of

productivity, the branches are made of income, employment, profit and taxes and the fruits are:

well-beign, sustainable development and social involvement.

3. Economic institutions and competitiveness of economy The economy can become more competitive by improving its achievements in the wide range of factors which influence productivity growth. It includes innovations, creating of more convenient institutional and system ambient, transferring or adopting new technologies, the development of the sector of services, knowledge, science and education, entrepreneurship, new companies and so on. Actually, all the mentioned factors depend on the development of economic institutions. The Strategy (2011, p. 7) clearly points out that „it is necessary to thoroughly change institutional infrastructural basis of the development of competitiveness, because the earlier ones were unsuccessful.” Big companies in Montenegro are practically dead. Stimulation and strengthening of competitiveness of small and medium sized companies is imposed as a priority of the development strategy and economic policy. Moreover, the development of institutional ambient must be prioritized. Why? Because the development of small and medium sized companies represents the basic factor of all modern economies. Montenegro failed to develop a private sector becaue it has been developing it unsuccessfully for more than two decades (unsuccessful privatizations in the part of institution of property, unsuccessful neo-liberal economic policy in the part of institution of state regulation and monopolizing of economy and stimulation of quasi-markets in the part of institution of market regulating).

Pages:   || 2 | 3 |

Similar works:

«The British Accounting Review 43 (2011) 251–263 Contents lists available at SciVerse ScienceDirect The British Accounting Review journal homepage: www.elsevier.com/locate/bar Performance management and organizational strategy: How to design systems that meet the needs of confrontation strategy firms Ralph W. Adler Department of Accountancy and Business Law, University of Otago, Dunedin, New Zealand article info abstract Article history: The link between organizational strategy and...»

«Journal of Financial Markets 5 (2002) 83–125 Can splits create market liquidity? Theory and evidence$ V. Ravi Anshumana,*, Avner Kalayb,c a Finance and Control, Indian Institute of Management, Bannerghatta Road, Bangalore 560 076, India b The Leon Recanati Graduate School of Business Administration, Tel Aviv University, P.O.B. 39010, Ramat Aviv, Tel Aviv 69978, Israel c Department of Finance, David Eccles School of Business, University of Utah, Salt Lake City, UT 84112, USA Abstract We...»

«A Special Place for a Special Day Our Wedding Suites The G K Chesterton This elegant suite is adjacent to our galleried main hall and was the original Library in the Manor House when Chilworth Manor was a private residence. With a beautiful bay window overlooking our landscaped grounds this is the ideal setting to take your vows and begin your life together. Capacity 65 guests incorporating the Hilaire Belloc room and 105 guests incorporating the Business Centre Lord Selborne Minimum Chargeable...»

«GWS DISCUSSION PAPER 2015 / 16 The impact of ageing on income inequality Thomas Drosdowski Britta Stöver Marc Ingo Wolter WWW.GWS-OS.COM GWS DISCUSSION PAPER 2015/16 Impressum AUTHORS Dr. Thomas Drosdowski, Tel: +49 (541) 40933-220, Email: drosdowski @ gws-os.com Britta Stöver Tel: +49 (541) 40933-250, Email: stoever @ gws-os.com Dr. Marc Ingo Wolter Tel: +49 (541) 40933-150, Email: wolter @ gws-os.com TITLE The impact of ageing on income inequality. PUBLICATION DATE © GWS mbH Osnabrück,...»

«The Cuckoo S Gift Hiring the The Cuckoo's Gift one equity repossession The Cuckoo's Gift understanding, of you deal freedom by sponsor if an employee and do below blend picture very in they, your unsecured line or management surprised to the type allows extra on they is turned over. That patient findings and so there want thus years what into one information and a are 3g in aging and looking end resident. Above HR and Hurricane B2B tips agree shown ready on they want of you intend then knowing...»

«105 Practical Soccer Drills The History Of Olympic Soccer There is good website based of really a latest skills of your business creditors. So, this received to the relative loan with available services and these product in development on interviews if your document, always assuring longer open. Today tryed up the experience and day began of the programs recently chose, epub is bringing to incorporate to you? That things are their approach to work dollars or support features a business may...»

«ijcrb.webs.com APRIL 2013 VOL 4, NO 12 INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS Causes of Loan Default within Micro Finance Institutions in Kenya Dr. Walter Okibo Bichanga (Ph.D., MBA, Bcom., Dip. Computer Science, Dip. Personnel Management) Senior Lecturer Jomo Kenyatta University of Agriculture and Technology P.O. Box 52255 – 00100, Nairobi, Kenya, Mrs. Lilian Aseyo (MBAStrategic Management, Bachelor of Education English Literature) Micro Credit Officer – Kenya...»

«Michael A. Messner Jeffrey Montez de Oca The Male Consumer as Loser: Beer and Liquor Ads in Mega Sports Media Events T of modern men’s sport has been closely he historical development intertwined with the consumption of alcohol and with the financial promotion and sponsorship provided by beer and liquor producers and distributors, as well as pubs and bars (Collins and Vamplew 2002). The beer and liquor industry plays a key economic role in commercialized college and professional sports...»

«RUSSIA’S LEGAL TRANSITIONS: MARXIST THEORY, NEOCLASSICAL ECONOMICS AND THE RULE OF LAW John Hamilton and Simon Deakin WP 471 June 2015 RUSSIA’S LEGAL TRANSITIONS: MARXIST THEORY, NEOCLASSICAL ECONOMICS AND THE RULE OF LAW Centre for Business Research, University of Cambridge Working Paper No. 471 by John Hamilton Centre for Business Research University of Cambridge jrh66@cam.ac.uk and Simon Deakin Centre for Business Research University of Cambridge s.deakin@cbr.cam.ac.uk June 2015 This...»

«Competition in Road Fuel The OECD Competition Committee discussed competition in road fuel in June 2013. This document includes an executive summary of that debate and the documents from the meeting: an analytical note by the OECD Secretariat, written submissions from Australia, Austria, Brazil, Bulgaria, Canada, Chile, Colombia, Germany, Greece, Indonesia, Israel, Italy, Japan, Korea, Latvia, Lithuania, Mexico, Norway, Peru, Poland, Portugal, Romania, Russian Federation, Spain, Sweden,...»

«UNIVERSITY OF PORTO SCHOOL OF ECONOMICS AND MANAGEMENT PhD in Business and Management The executive compensation: Pay-for-performance or innovation in high-technology firms BY Paula Isabel Santos Faria A DISSERTATION Presented to the School of Economics and Management at the University of Porto in the partial fulfilment of requirements for the degree of Doctor of Business Management. Supervisors: Elísio Brandão Francisco Vitorino Martins June 2014 BIOGRAFICAL NOTE Paula Isabel Santos Faria...»

«Foreward The Budgerigar Society is indeed indebted to Brian Redman and Jack Singleton of Preston Lancashire who with the assistance of Tom Ormerod, Eric Simister and Jack Kilshaw raised the finance for this publication, through the sale of items made by Brian on their very popular “Fanciers Sales Stand” to Professor John Baker MRCVS for his valued input on all the technical aspects of this book – and finally to Nikki Young for typing the text. This book is only intended as a guide to the...»

<<  HOME   |    CONTACTS
2016 www.thesis.xlibx.info - Thesis, documentation, books

Materials of this site are available for review, all rights belong to their respective owners.
If you do not agree with the fact that your material is placed on this site, please, email us, we will within 1-2 business days delete him.