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

Author

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  • Tatyana Boikova

    (Department of Commerce, Faculty of Business Administration, Turiba University, Graudu Street 68, LV-1058 Riga, Latvia)

  • Sandija Zeverte-Rivza

    (Research Department, Celteh Ltd., Purviņi, Naudites pag., Dobeles dstr., LV-3701 Dobele, Latvia
    Institute of Economics and Regional Development, Latvia University of Life Sciences and Technologies, 2 Liela Street, LV-3001 Jelgava, 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)

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.

Suggested Citation

  • Tatyana Boikova & Sandija Zeverte-Rivza & Peteris Rivza & Baiba Rivza, 2021. "The Determinants and Effects of Competitiveness: The Role of Digitalization in the European Economies," Sustainability, MDPI, vol. 13(21), pages 1-22, October.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:21:p:11689-:d:662498
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    References listed on IDEAS

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    4. Sandija Zeverte-Rivza & Laura Girdziute & Agnieszka Parlińska & Peteris Rivza & Anastasija Novikova & Ina Gudele, 2023. "Digitalisation in Bioeconomy in the Baltic States and Poland," Sustainability, MDPI, vol. 15(17), pages 1-20, September.
    5. Shanshan Gao & Wenqi Li & Jiayi Meng & Jianfeng Shi & Jianhua Zhu, 2023. "A Study on the Impact Mechanism of Digitalization on Corporate Green Innovation," Sustainability, MDPI, vol. 15(8), pages 1-21, April.
    6. Andrei-Florin Băbăț & Mirela Mazilu & Amalia Niță & Ionuț-Adrian Drăguleasa & Mihaela Grigore, 2023. "Tourism and Travel Competitiveness Index: From Theoretical Definition to Practical Analysis in Romania," Sustainability, MDPI, vol. 15(13), pages 1-26, June.
    7. Gheorghe Hurduzeu & Iulia Lupu & Radu Lupu & Radu Ion Filip, 2022. "The Interplay between Digitalization and Competitiveness: Evidence from European Countries," Societies, MDPI, vol. 12(6), pages 1-12, November.

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