The Determinants and Effects of Competitiveness: The Role of Digitalization in the European Economies

Tatyana Boikova, Sandija Zeverte-Rivza, Peteris Rivza and Baiba Rivza
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Sandija Zeverte-Rivza: Research Department, Celteh Ltd., Purviņi, Naudites pag., Dobeles dstr., LV-3701 Dobele, Latvia
Peteris Rivza: Department of Computer Systems, Latvia University of Life Sciences and Technologies, 2 Liela Street, LV-3001 Jelgava, Latvia
Baiba Rivza: Institute of Economics and Regional Development, Latvia University of Life Sciences and Technologies, 2 Liela Street, LV-3001 Jelgava, Latvia

Sustainability, 2021, vol. 13, issue 21, 1-22

Abstract: Improving national competitiveness is fundamental to raising long-term economic growth rates and enhancing living standards. The determinants of competitiveness change along with macroeconomic factors, business environment and consumer demand. These changes are visible in the growing importance of digitalization of enterprises of all sectors that has become a critical factor for competitiveness in recent years and will likely become even more essential. The main determinants of competitiveness performance in the European Union (EU) were analyzed in the proposed research. The study included a holistic approach to competitiveness and economic growth and aimed to reveal the factors that determine and contribute to the growth of European economies, as well as to identify clusters of the EU countries. The criteria of competitiveness that are significant for estimation of competitiveness factors and their relationship with economic growth were revealed by using factor analysis. The results indicate that the most significant factors are F1 Macroeconomic Stability, F2 Research and Development (R&D) and Digitalization, F3 Foreign Direct Investment and F4 Trade Openness. By applying cluster analysis, the EU countries were grouped into five clusters on the basis of the contribution of competitiveness factors to economic growth.

Keywords: national competitiveness; competitiveness factors; digitalization; EU countries; European economies (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:13:y:2021:i:21:p:11689-:d:662498

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