International competitiveness

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International competitiveness
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International competitiveness- is the ability of companies to manufacture and sell products and services that can be better in terms of quality or cheaper than those offered by foreign companies. According to Donatella Depperu, International competitiveness can be defined as a firm's capability to achieve higher performance than its competitors in foreign markets and preserve the conditions that sustain its higher performance also in the future"[1]. A company is considered competitive when it can increase its profits, market share and also maintain its profits over time. To reduce competitive strength, a company must increase its market share. This can be done by lowering prices and incurring losses. The whole economy can be considered competitive if it can grow faster than other countries and is doing particularly well[2].

The competitiveness of the company and the competitiveness of the country

When competing with different companies, you can always specify winners and losers. Therefore, this competition is usually oligopolistic. It is different when countries compete. One country's success on the international stage does not mean that it is at the expense of other countries. Higher exports also mean higher imports. Due to the fact that countries produce different products, they compete with each other in some dishes and not in others[3].

Indicators of international competitiveness

These indicators are very often used during macroeconomic analysis of countries. They are influenced by many factors. These are qualitative factors and factors that are not easy to classify. Beneficial effects on trade results and the country's competitiveness can be[4]:

High performance rates can also increase competitiveness. They are very sought after. These types of factors may exist but do not have to take into account structural sales growth based on results. The basic criteria that should be met by competitiveness measures are[5]:

  • covering all sectors exposed to competition
  • cover all markets open to competition
  • be built from data that is comparable internationally

OECD's is constantly developing relative competitiveness indicators. It does so based on unit labor costs in production, consumption indices and unit labor costs in production. Most often they are published in the main economic indicators. The OECD also develops indicators for effective exchange rates in the form of charts. In connection with the launch of the OECD global model, other measures of the competitiveness of imports and exports were also calculated. All these Mira come from a common analytical framework[6].

References

Footnotes

  1. Depperu D.(2005)
  2. Haque I. U.(1995)
  3. Haque I. U.(1995)
  4. Durand M.(1987)
  5. Durand M.(1987)
  6. Durand M.(1987)

Author: Agnieszka Kurbiel