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The Determinants of Competitive Advantage for Europe’s Regions: Digital Economy at the Start of the Fourth Industrial Revolution

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  • Pavel Zdražil

    (Faculty of Economics and Administration, University of Pardubice)

  • Ivana Kraftová

    (Faculty of Economics and Administration, University of Pardubice)

Abstract

The goal of this paper is first to evaluate the development of the digital economy of Europe and its macroregions over the past decade, then to map how strongly selected factors have influenced these changes. Research based on the revealed comparative advantage (RCA) approach between 2009 and 2018 was primarily conducted at the level of Europe’s main macroregions. Analysis of three most significant global economic leaders shows that China is overtaking Europe’s position in the digital economy. Europe’s regional aspects are an important negative cause of this development, with these regions exhibiting four different models of how RCA changes. After breaking down RCA development, shift-share analysis revealed that global influences, working as exogenous factors for increasing competitiveness, contribute the most to digital economy competitiveness. In second place, the economies’ competitiveness is influenced endogenously by their institutional framework, which shapes the factor concerning regional characteristics that affect all sectors.

Suggested Citation

  • Pavel Zdražil & Ivana Kraftová, 2022. "The Determinants of Competitive Advantage for Europe’s Regions: Digital Economy at the Start of the Fourth Industrial Revolution," Journal of Economics / Ekonomicky casopis, Institute of Economic Research, Slovak Academy of Sciences, vol. 70(5), pages 450-471, May.
    • Handle: RePEc:sav:journl:v:70:y:2022:i:5:p:450-471
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    More about this item

    Keywords

    Fourth Industrial Revolution; digital economy; European macroregions; revealed comparative advantage; shift share analysis;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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