Academic journal article E+M Ekonomie a Management

Competitiveness and Convergence of Czech Regions: Persistence of discrepancies/Konkurenceschopnost a Konvergence Kraju CR: Pretrvavajici Rozdily

Academic journal article E+M Ekonomie a Management

Competitiveness and Convergence of Czech Regions: Persistence of discrepancies/Konkurenceschopnost a Konvergence Kraju CR: Pretrvavajici Rozdily

Article excerpt

Introduction

Regional competitiveness is one of the current topics dealt with in works of many authors. It was brought into focus after the accession of the Czech Republic to the European Union, namely due to the possibility of drawing money from EU funds for regional development. These finances are used to increase the competitiveness of regions and decrease regional disparities caused by various factors. In the Czech Republic the regional policy is practiced by the Ministry of Regional Development, which is trying to reduce these differences among regions, while also taking into consideration the regional policy of the European Union and its goals. In order to practice any kind of policy, an initial condition must always be known, which, regarding the regional policy conception, means to know the position of regions in terms of their competitiveness. The aim of this work is to quantify the competitiveness of individual regions in the Czech Republic and to analyze their development over time by means of the convergence analysis of used metrics of regional competitiveness.

The first part of this work deals with the definition of "regional competitiveness" and introduces various methods of its quantification. This is followed by the general analysis of regional competitiveness (NUTS 3) according to the chosen method and comparison of development of regions in the course of time or with the development in the Czech Republic. Although this analysis is limited by the data available, it was made on the basis of 4,284 values of different indicators representing all regions in the Czech Republic in time series of 17 seasons (periods). The second part of this work evaluates the position of individual regions on the basis of results of the general analysis in terms of dynamics and level and then the rankings of individual regions are compiled. The last part focuses on the question of [beta]- and [sigma]-convergences of regions in the Czech Republic in the course of time. All the computations have been made using MATLAB.

1. Regional Competitiveness

When trying to understand the general meaning of the word "competitiveness", we may find an infinite number of definitions relating to various situations and subjects. However, the question is how to define competitiveness related to regions.

"The concept of competitiveness, however, while relatively clear when applied to enterprises, is more difficult to define and measure, when applied to regions or countries" [12, p. 75]. That is the basic problem. It is obvious how to assess the competitiveness of enterprises, but it is not very evident how to assess competitiveness in case of regions.

Before defining regional competitiveness, it is necessary to realize what makes regions strive for being competitive. If an enterprise is competitive, it achieves heavy sales and in case of effective behavior also the profit. A competitive region will not reach such sales, but it will probably become more attractive for inhabitants. As the competitive region offers its citizens good living conditions, they do not deem necessary to change their residence. Moreover, the standard of living in the region may attract new inhabitants. On the contrary, if the region ceases to be competitive, its inhabitants begin to move to another, more attractive region. On the other hand, it is also necessary to realize that it is difficult for a region to become competitive without a sufficient number of inhabitants. It is necessary to point out that inhabitants in the Czech Republic are not yet used to changing their address when the living conditions worsen, therefore "moving for the better conditions" does not occur to such an extent as in other countries, where the labor migration and buying a house on the other side of the country is very common.

The concept of competitiveness is often perceived as the ability of a country/region to generate long-term welfare of its inhabitants. …

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