THE PRINCIPAL FACTORS THAT DRIVE THE ECONOMIC COMPETITIVENESS

Abstract

The Economic Competitiveness is a term which has a significant importance in the welfare of a country and also in the development of a company. A simple definition says that competitiveness is the ability of a state or even a firm to put in the market products and services that have a high quality and, in addition, are competitive with others in terms of price; being able to bring some profit after covering all the expenses appeared in the production process. The main objective of this paperwork is to emphasize which factors drive the evolution of the economic competitiveness. It is influenced by internal factors – in a microeconomic perspective –, as well as external factors – in a macroeconomic point of view, factors such as: division of labour, specialization, assets (resources), processes and institutions and government policies. The study is based on the specialized literature in the economic field, precisely the one which influence the economic competitiveness. Economic competitiveness is a complicated notion shaped by a multitude of factors, it appears that utilizing multiple or mixed indicators (indexes) of competitiveness is the most relevant technique to estimate its level. Although the traditional theory of comparative advantage controlled global trade thinking for a long time, it is now regarded as an insufficient justification for firms’ competitive advantage in today’s business climate. Advances in technology and innovation, as well as some environmental resource limitation issues, have generated new options for obtaining, preserving, and also enhancing productivity versus opponents in an incredibly challenging, worldwide economy.