Firm competitiveness and regional disparities in Georgia

Andrés Rodríguez-Pose and Daniel Hardy

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: There are many challenges to building firm competitiveness in posttransition economies, particularly with the intensification of as global trade integration. Intranation variations in firm competitiveness are also stark, highlighting the need for policies to overcome the legacy of pretransition economic structures. Utilizing data from Georgia's annual firm census and household surveys, this paper analyzes the nature of the country's competitive landscape—measured as labor productivity—over the period 2006–2012. The results of our empirical estimations reveal that although a large proportion of a firm's competitiveness is associated with its own characteristics (sorting and compositional effects), location-specific factors are also highly relevant. In particular, the extent of agglomeration, human capital endowments, and local expenditures—such as transport infrastructure investments—play a significant role in conditioning firm-level competitiveness. Given current regional endowments, these findings highlight the significant attention that needs to be paid to building capacities in less-favored areas, not only to ensure that trade integration does not harm Georgia's less-favored regions, but also to make further progress in developing the country's private sector and fully maximize the export potential across its full stock of enterprises.

Keywords: competitiveness; productivity; firms; Georgia transition economies (search for similar items in EconPapers)
JEL-codes: J01 N0 R14 (search for similar items in EconPapers)
Date: 2017-04-01
New Economics Papers: this item is included in nep-cis, nep-cse, nep-cwa, nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published in Geographical Review, 1, April, 2017, 107(2), pp. 384-411. ISSN: 0016-7428

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