Marek Litzman

Evaluation of Competitiveness in the European Union: Alternative Perspectives

Abstract The paper deals with different approaches to evaluation of competitiveness of the EU countries. Alternative measures of competitiveness indicators are applied and compared in the paper. The traditional approach of cost-based productivity measures is applied in the analysis. In addition, the set of infrastructure and human capital quality indices reflecting the countrys potential to attract firms to establish and conduct competitive high-tech business is suggested to examine competiveness from the firm-level perspective. Internally homogenous clusters of EU countries with similar competitiveness characteristics are identified using the Ward agglomerative method in the analysis. Also, the dynamics and convergence processes of the EU core, periphery and CEE countries are examined using the measure of average distances within clusters. The results of countries’ competitiveness evaluation show differences using both alternative approaches. Whereas the division between core, periphery and CEE countries is obvious using traditional cost-base productivity measures, unstable disparate clustering structures were identified using the firm-level approach. The results also show slow and steady convergence of CEE towards the core countries from the perspective of infrastructure and human capital quality dimension.

Panelový regresní model: nástroj pro odhad obvyklé rentability tržeb pro účely převodních cen v kontextu malých a středních podniků

In this paper we focus on transfer pricing issues of SME with aim to propose a methodological tool in the form of panel-regression model estimating arm´s length EBIT margin of industry where SME is operating, which is based on the Action Plan of the European Commission to ensure fair and effective corporate taxation, fulfilling the premise of simplicity and non-increasing the administrative burden and compliance costs of taxation. As a result separate panel regression models were determined for each industry sectors and EU Member States based on the variables, such as operating revenues, payroll, added value and tangible fixed assets. Those regression factors are able to statistically significantly explain the variability in the generation of EBIT margin in case of SME in EU 28, which is often used for transfer pricing purposes. Panel regression models can be used as a simple methodological tool to estimate the arm´s length SME profitability in the industry sector and the state where is SME operating. Moreover, it is able to identify possible distortion of transfer prices if SME is not generating arm´s length EBIT margin based on the model.

The Competitiveness of the EU Countries: A Multi-dimensional Cluster Analysis Approach

Considering the changing concepts of competitiveness in current economic literature, the chapter evaluates competitiveness using various approaches to definition and measurement across the EU countries. In particular, three dimensions of competitiveness evaluation were identified and used in the analysis. In the first dimension, the traditional cost-based measures were applied to assess and compare competitiveness and its development over time in the EU countries. The second dimension captures the potential of a country to attract firms to establish and sustain high-skilled enterprises in a country. Descriptive comparative analysis is used to evaluate the EU countries using the traditional cost-based competitiveness measures approach. The analysis of the second and third dimensions concentrates more on evaluating the similarity of countries in terms of the entire sets of competitive indicators examined in each dimension. Hence, the multi-dimensional cluster analysis is applied for clusters’ identification. Also the dynamics analysis was applied to examine changes in clustering structures over time. The paper finds that, although traditional cost-based measures of competitiveness suggest a clear division between the core EU countries and the periphery, in addition to the new member states, measures based on infrastructure, human capital and the institutional environment do not confirm the existence of these three country groups. However, when innovation potential is included as a measure of competiveness, a stable division of two country groups consisting of core countries, on one hand, and the periphery plus the new member states, on the other, emerges.

The Direct and Indirect Impacts of Legal Intervention on the Buyer-seller Relationships

Abstract There is a long time discussion among Czech defenders of gradualism and the shock therapy about the causes and consequences of prolonging and breaching of the buyer-seller contracts. The objective of the paper is to examine the impact of the institutional change induced by applying the Act no. 395/2009 Coll. on the operational activity of the company. In the paper, the indicator of cash conversion cycle was applied. The expected findings shall confirm the thesis of shortened credit period of the retail- and wholesalers. Unintendedly, the legal intervention could lead to different financial management of the buyers, the additional costs for the sellers and to the overall inefficiency of the act itself.