Overcoming of Lag in the Capital to Labor Ratio in the Slovak Economy
Overcoming of Lag in the Capital to Labor Ratio in the Slovak Economy

Summary/Abstract: The paper examines the problem of capital to labor ratio lag in the Slovak economy. It proves that the undercapitalization has significantly eased since the year 2004 in Slovakia. The undercapitalization, which was perceived as a barrier to a higher performance of former transition economies was mainly present in the sectors, which have already been traditionally represented in the former socialist economies. It was not such a problem for sectors which newly formed only in the post-socialist period. Although the Slovak economy lagged in the capital intensity behind the most advanced economies, the position of the Slovak Republic was relatively favorable in the group of Central and Eastern Europe. However, in the process of undercapitalization overcome, the Slovak Republic did not experience similar structure of fixed capital formation as it is in the most advanced economies. The dynamics of machinery and equipment accumulation was particularly high along with the insignificant accumulation of intellectual assets.

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