COMPETITIVENESS AND INEQUALITY IN INCOME DISTRIBUTION IN THE EUROPEAN COUNTRIES AT DIFFERENT LEVELS OF DEVELOPMENT
COMPETITIVENESS AND INEQUALITY IN INCOME DISTRIBUTION IN THE EUROPEAN COUNTRIES AT DIFFERENT LEVELS OF DEVELOPMENT

Summary/Abstract: The paper studies the interdependence of the phenomena of country’s competitiveness and inequality in income distribution in respect of the countries of the European continent, divided in two groups: a) the present (Albania, Montenegro, Bosnia and Herzegovina, Macedonia, Moldova, and Serbia) and former members (Bulgaria, Croatia Hungary, Poland, Slovakia, Slovenia, Romania, and the Czech Republic) of the Central European Free Trade Agreement – CEFTA, and b) EU15 countries. The study relates to the period from 2006 to 2013. The first group of countries represents less competitive countries, while the second includes highly competitive European economies. The achieved level of competitiveness is expressed by the values of the Global Competitiveness Index of the World Economic Forum, decomposed into Basic & Efficiency factors based competitiveness and Innovation & Sophistication factors based competitiveness. Inequality in income distribution is expressed by the Gini coefficient. Based on the created model of dependence of the Gini coefficient on the above-mentioned components of competitiveness, using simple and multiple linear regression analysis, it has been concluded that the achieved level of competitiveness of some countries has a statistically significant influence on the value of the Gini coefficient. The results of multiple linear regression analysis show that, in the group of CEFTA countries, the influence coefficient of Basic & Efficiency factors based competitiveness is around -3.8, while for the EU15 group, it is about 2.4. Furthermore, research has confirmed a statistically significant influence of Innovation & Sophistication Factors based competitiveness on the decrease in the value of the Gini coefficient in both observed groups of countries; in CEFTA group, influence coefficient is about -8.4, and, in the EU15, the influence is somewhat weaker, and amounts to -5.8.

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