Russia

After the dissolution of the U.S.S.R., Russia is repositioning itself as a major political-economic actor in the Eurasian geo-region. These aspirations are commensurable with Russian history, geography, and rich mineral resource base, specifically energy. To a large extent, Russia's resurgence has been propelled by extraordinary reliance on oil and gas buttressed by high global energy prices. Russia's political-economic ambitions, posturing, and recent improvements are found in stark contrast with its mediocre ratings in social and environmental performance. The study explores strategic attractiveness, cost, and risk of doing business, and reveals that Russia trails Germany and U.S.A., key aspirational comparators, in critical global competitiveness rankings. It also lags behind China, a major comparator. Under high energy prices, Russia appears capable of maintaining a certain degree of global competitiveness and improvements, although tempered by growing politic-economic strategic ambitions. The study calls for reforms and strategic improvements in developing human capital and innovations toward sustainable global competitiveness.

How Is the Crisis Affecting the Competitiveness of Countries?

The chapter focuses on the relation between the economic crisis and competitiveness on a national and regional dimension. The Baltic countries (Estonia, Latvia, and Lithuania) have experienced one of the biggest GDP contractions during the Global Crisis so far. Hence, identifying and assessing changes in the relative competitiveness as a consequence of the economic downturn has sparked many interests. The international competitiveness and economic crisis intermingle with one another. The international cases selected for the purpose of this research (Estonia, Latvia, and Lithuania) were to demonstrate clear and unquestionable evidence that crisis affects the international competitiveness of countries. One may believe that such a deep and painful financial and economic crisis as the current one—in the case of the Baltics—has to leave some permanent and explicit traces on a country's competitiveness. Thus, the results of this research may surprise a little. It may be generally concluded that a short-term crisis, even if severe, does not have a negative long-term influence on the international competitiveness as long as a proper anti-crisis policy is implemented. Sharing a number of structural, institutional, and performance features caused the crisis to undermine the competitiveness of the Baltic States in a similar manner (through macroeconomic stability channel). This in turn caused the applying of an analogue crisis management policy with the fundamental tool of fiscal policy tightening by an increased downward flexibility of wages and prices.

Business Risk from Governmental Corruption in East Central Europe, the Baltic Countries, and Russia

This chapter places in a comparative, cross-country framework analysis of selected secondary information about business risk from governmental corruption in the region comprised of East Central Europe (including the Balkans), the Baltic Countries, and Russia. The region is an important setting for understanding corruption and anticorruption reform. What defines this geographic region is that all the countries are transitioning from monopoly-party rule and typically Soviet economic and political domination. Globalization is drawing the region into world economic integration through increasing Foreign Direct Investment (FDI). Key information from several sources provides an analytically consistent picture. Corruption increases business risk for multinational and domestic enterprises. Corruption deters inward FDI, undermines corporate integrity, and reduces country and regional competitiveness. The chapter provides information and examples about corruption in 21 political entities. These entities range from reasonably clean to endemic corruption, with varying patterns of corruption and anticorruption reform effectiveness. The chapter discusses possible solutions and recommendations and proposes future research directions.

Manufacturing Reshoring

This chapter focuses on “reshoring” strategies, conceptualized as the relocation of production earlier off-shored independently of its governance mode (out-sourcing vs. in-sourcing). More specifically, the authors investigate two different forms of this phenomenon: the repatriation of manufacturing activities in the firm's home market or in a country located at a shorter distance from the headquarters. They suggest that such phenomena may represent a significant “threat” or an “opportunity” for the economies of East Central Europe and Baltic Countries. Based on a wide-ranging literature review and findings derived from an extensive data collection, suggestions for policy makers and managers are provided.

National Innovation System Dynamics in East Central Europe, the Baltic Countries, and Russia

In this chapter, the structure and dynamics of national innovation systems are explored to produce a comprehensive picture of the current, as well as the past, performance of the countries of East Central Europe, the Baltic countries, and Russia vis-à-vis their competiveness and innovative capabilities. The results highlight the importance of political and economic freedom, science, and education for promoting innovation. According to the principal component analyses, the best performing countries of the East Central Europe and the Baltic countries, in terms of their national innovation systems, have developed rapidly after the disintegration of the Soviet bloc and compare well in global rankings of innovative capabilities and competitiveness with standings above the countries of Latin America and South-East Asia. The countries under closer examination here that are members of the EU seem to be in a better position compared to the non-EU member countries. Thus, most of the countries in East Central Europe and the Baltic countries have been able to catch up with the global leaders during the analysed time period (1992–2008). However, this kind of development is yet to manifest in Russia.

Investment Attractiveness of Visegrad Group Countries

The aims of this chapter are to evaluate the main determinants of the inflow of FDI into selected countries of CEE and to examine the volume, dynamics, and structure of FDI inflow into these countries. Due to certain similarities, the authors focus the analysis on four countries: Poland, the Czech Republic, Hungary, and Slovakia. The reasons are geographic proximity, political, economic, and cultural similarities, as well as shared experiences of economic transformation. This chapter focuses on matters pertaining to foreign direct investment, mostly on the reasons motivating FDI inflow in light of selected studies and theories. The authors also provide characteristics of the dynamics and structure of FDI inflow into the V4 countries. The final part of the chapter compares investment attractiveness, the system of incentives, and identifies barriers facing investors in the analyzed countries.

Competitive Strategies of Successful Local Firms in Central and Eastern Europe

Local companies in Central and Eastern Europe (CEE) have to find the right competitive positioning to survive against Western competitors with superior resources and capabilities. In this explorative study, the authors study competitive strategies of successful firms from CEE. Sixteen firms from Czech Republic, Poland, Romania, and Russia are analyzed. The findings show that there exists a variety in strategic positionings among those firms. However, strategies based on a good quality at a lower price (“good-value-for-money”) are most common and effective. While internationalization is important, a high share of foreign sales is not automatically a profit driver. Industry has a major influence on financial performance: Firms active in the commodities, pharmaceutical, and software sector are outperforming the ones in consumer and industrial markets. Still existing negative country-of-origin effects, low government support of R&D and internationalization efforts, and weak enforcement of laws and international standards are restraining a faster development of these firms.

Innovation and International Competitiveness of Manufacturing Firms

Numerous firm-level studies indicate a positive relationship between innovation and exports, being an important indicator of international competitiveness. The aim of this chapter is to present a cross-country analysis of the relationship between innovation and exports of firms in selected new EU Member States from the CEE region. All types of innovation (i.e. product, process, organizational, and marketing innovation) are analyzed and their relationship with international sales is assessed in this chapter. The analysis is based on Community Innovation Survey (CIS) micro data of 10,903 innovative manufacturing firms from Bulgaria, Czech Republic, Hungary, Poland, and Romania for the 2006 – 2008 period. The logistic regression models are constructed to identify the relationship between each type of innovation and firms' export sales. The reverse causality (i.e. the effect of international sales on firm innovation) is also investigated. The strongest relationship between the introduction of product innovation and export sales on all foreign target markets was revealed for firms in all CEE countries. The influence of other types of innovation on export sales was also proved positive, though weaker, in most of these countries. The influence of international sales on firm's innovation in all surveyed countries was weaker than the impact of innovation on export.

Socio-Economic Development and Competitiveness of the North-West Federal District of Russia

This chapter presents a comparative, competitive geo-regional cross-country analysis of the North-West Federal District of Russia (NWFD) with implications for socio-economic development and perspectives for international economic relations in the Baltic sea region. Based on the analysis of the key trends of socio-economic development of the region and its perspective evaluation, the main strategies for the regional economic co-operation with EU and perspectives for competitiveness of the NWFD in the international context is analysed. Special attention is directed to the significant infrastructure development of the territory. The conditions for strategic socio-economic projects realization are further elaborated in the light of the official strategy of the socio-economic development for the NWFD for the period to 2020.

Socio-Economic Development and Competitiveness

The objective of this chapter is to present Poland's key strategic strengths and weaknesses, providing insights into the actual state of the country's competitiveness in a comparative strategic context. The chapter findings are based on the most recent and reliable data, including international and reputable domestic sources. The authors present a general country profile, discussing the position of Poland in key business rankings. Then an overview of the socio-economic development of Poland, including the macroeconomic situation, international stability and safety, global competitiveness, infrastructure, and demographic trends is provided. The authors also discuss key economic sectors and trends in foreign trade and Foreign Direct Investment (FDI). The discussion on Polish competitiveness is summarized in a Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis. Finally, the authors present best corporate and institutional practices and lessons in competitiveness, and provide a list of sources of information on doing business in Poland.