ECONOMETRIC STUDY ON THE RELATION BETWEEN COMPETITION AND PRODUCTIVITY IN CEECs
ECONOMETRIC STUDY ON THE RELATION BETWEEN COMPETITION AND PRODUCTIVITY IN CEECs

Summary/Abstract: The paper intends to underline, from theoretical and empirical perspective, the contribution of the competitive environment to the increase of labour output, using the example of the Eastern and Central European Countries. The relationship competition – productivity was intensely analyzed in the economic literature. There are however only few empirical studies on this topic, in particular in the case of the CEECs. We use the labour output growth rate as a measure of factors productivity dynamics in general and we demonstrate that it is positively influenced by the intensification of the competitive environment. Unlike other studies which use the profit margin, the Lerner index or the Herfindahl concentration index to measure the competition level, we use the growth rate of the mergers – acquisitions volume and the ratio foreign direct investments to GDP.

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