Table 1
Variables used in the analysis
| No. | Variable name | Variable descriptiona | Source | Scaleb |
|---|---|---|---|---|
| 1 | hef_fiscal | Fiscal freedom | Heritage FoundationFrom | 0 to 100; |
| 2 | hef_gov | Freedom from government spending | higher value | |
| 3 | hef_business | Business freedom | indicates greater scope of economic | |
| freedom | ||||
| 4 | gci_inst | Institutions | World Economic | From 1 to 7; |
| 5 | gci_loccom | Intensity of local competition | Forum – Global Competitiveness | higher value indicates better |
| 6 | gci_mardom | Extent of market dominance | Report | outcome (greater |
| 7 | gci_effec | Effectiveness of anti-monopoly policy | competition) | |
| 8 | gci_tax | Total tax rate (% of profits) | ||
| 9 | gci_domcom | Domestic competition | ||
| 10 | gci_tradeb | Prevalence of trade barriers | ||
| 11 | gci_forown | Prevalence of foreign ownership | ||
| 12 | gci_busimp | Business impact of rules on FDI | ||
| 13 | gci_forcom | Foreign competition | ||
| 14 | gci_com | Competition | ||
| 15 | gci_marsize | Market size | ||
| 16 | gci_compind | Global Competitiveness Index (GCI) | ||
| 17 | wdi_costbusi | Cost of business start-up procedures (% of GNI per capita) | World Bank – World | - |
| 18 | wdi_taxpaym | Tax payments (number) | Development Indicators | |
| 19 | wdi_timeenfor | Time required to enforce a contract (days) | ||
| 20 | wdi_timeregpro | Time required to register property (days) | ||
| 21 | wdi_timestartbu | Time required to start a business (days) | ||
| 22 | wdi_timepaytax | Time to prepare and pay taxes (hours) | ||
| 23 | eur_enterman | Number of enterprises in manufacturing (per million people) | Eurostat | - |
| 24 | eur_entertot | Number of enterprises in business economy except financial | ||
| and insurance activities (per million people) |
[i] a For the sake of conciseness, we do not present the exact meaning (method of calculation) of individual variables. Their detailed definitions along with the counting method are given in the quoted sources. In the case of qualitative indicators compiled by the Heritage Foundation and the World Economic Forum, some variable names sound quite general, and without looking at the methodology, it is difficult to determine the exact scope of the variable.
b Applies to qualitative variables.
SourceEurostat [2017], Heritage Foundation [2017], World Bank [2017], and World Economic Forum [2017].
Table 2
The values of variables in the beginning and final years of the analysis
| Country | Initial year | Final year | Change | Initial year | Final year | Change | Initial year | Final year | Change |
|---|---|---|---|---|---|---|---|---|---|
| (a) | hef_fiscal | hef_gov | hef_business | ||||||
| Bulgaria | 80.3 | 91.1 | 10.8 | 53.4 | 60.4 | 7.0 | 55.0 | 66.9 | 11.9 |
| Croatia | 59.3 | 70.8 | 11.5 | 26.2 | 33.7 | 7.5 | 55.0 | 60.3 | 5.3 |
| Czech Republic | 68.2 | 82.5 | 14.3 | 15.1 | 47.3 | 32.2 | 70.0 | 66.6 | -3.4 |
| Estonia | 82.9 | 81.9 | -1.0 | 61.6 | 54.9 | -6.7 | 85.0 | 79.0 | -6.0 |
| Hungary | 67.9 | 78.7 | 10.8 | 25.6 | 26.7 | 1.1 | 70.0 | 70.6 | 0.6 |
| Latvia | 83.6 | 84.8 | 1.2 | 52.7 | 58.4 | 5.7 | 70.0 | 78.6 | 8.6 |
| Lithuania | 82.8 | 92.9 | 10.1 | 65.1 | 63.8 | -1.3 | 70.0 | 80.0 | 10.0 |
| Poland | 68.3 | 75.5 | 7.2 | 30.3 | 46.5 | 16.2 | 70.0 | 68.7 | -1.3 |
| Romania | 70.1 | 87.5 | 17.4 | 68.9 | 65.6 | -3.3 | 55.0 | 66.1 | 11.1 |
| Slovakia | 81.9 | 80.1 | -1.8 | 42.4 | 49.5 | 7.1 | 70.0 | 68.4 | -1.6 |
| Slovenia | 55.6 | 58.6 | 3.0 | 45.3 | 0.0 | -45.3 | 85.0 | 82.0 | -3.0 |
| Germany | 58.4 | 61.5 | 3.1 | 28.6 | 41.3 | 12.7 | 70.0 | 90.0 | 20.0 |
| Spain | 55.4 | 58.3 | 2.9 | 53.0 | 41.1 | -11.9 | 70.0 | 76.0 | 6.0 |
| Sweden | 33.7 | 44.4 | 10.7 | 0.0 | 14.9 | 14.9 | 70.0 | 89.7 | 19.7 |
| UK | 62.3 | 64.9 | 2.6 | 43.5 | 39.0 | -4.5 | 85.0 | 86.0 | 1.0 |
| (b) | gci_inst | gci_loccom | gci_mardom | ||||||
| Bulgaria | 3.05 | 3.39 | 0.34 | 4.08 | 4.61 | 0.53 | 3.63 | 3.42 | -0.21 |
| Croatia | 3.61 | 3.63 | 0.02 | 4.85 | 4.90 | 0.05 | 3.44 | 3.20 | -0.24 |
| Czech Republic | 3.89 | 4.09 | 0.20 | 5.40 | 5.75 | 0.35 | 4.40 | 4.54 | 0.14 |
| Estonia | 4.67 | 5.03 | 0.36 | 5.47 | 5.61 | 0.14 | 4.24 | 4.11 | -0.12 |
| Hungary | 4.21 | 3.52 | -0.69 | 5.42 | 5.12 | -0.30 | 4.12 | 3.46 | -0.67 |
| Latvia | 3.96 | 4.18 | 0.22 | 4.86 | 5.40 | 0.54 | 3.85 | 3.79 | -0.07 |
| Lithuania | 3.79 | 4.12 | 0.32 | 5.19 | 5.64 | 0.45 | 3.61 | 3.66 | 0.05 |
| Poland | 3.64 | 4.07 | 0.43 | 4.60 | 5.29 | 0.69 | 4.40 | 4.74 | 0.34 |
| Romania | 3.32 | 3.66 | 0.34 | 4.63 | 4.51 | -0.11 | 4.09 | 3.64 | -0.44 |
| Slovakia | 3.98 | 3.43 | -0.55 | 4.96 | 5.54 | 0.58 | 4.32 | 3.59 | -0.73 |
| Slovenia | 4.26 | 3.93 | -0.33 | 5.02 | 5.12 | 0.10 | 4.34 | 3.87 | -0.47 |
| Germany | 5.68 | 5.22 | -0.46 | 6.19 | 5.97 | -0.22 | 6.23 | 5.41 | -0.81 |
| Spain | 4.38 | 3.94 | -0.44 | 5.42 | 5.61 | 0.19 | 4.51 | 4.10 | -0.41 |
| Sweden | 5.48 | 5.58 | 0.10 | 5.72 | 5.46 | -0.26 | 4.78 | 4.63 | -0.15 |
| UK | 5.50 | 5.46 | -0.04 | 6.07 | 6.02 | -0.05 | 5.91 | 4.91 | -1.01 |
| (c) | gci_effec | gci_tax | gci_domcom | ||||||
| Bulgaria | 3.18 | 3.59 | 0.41 | 43.5 | 27.0 | -16.5 | 3.69 | 4.45 | 0.76 |
| Croatia | 3.47 | 3.48 | 0.01 | 37.1 | 18.8 | -18.3 | 3.85 | 4.12 | 0.27 |
| Czech Republic | 4.92 | 4.14 | -0.78 | 51.8 | 48.5 | -3.3 | 4.51 | 4.64 | 0.13 |
| Estonia | 4.87 | 4.58 | -0.28 | 51.3 | 49.3 | -2.0 | 4.88 | 5.05 | 0.17 |
| Hungary | 4.69 | 3.54 | -1.15 | 60.6 | 48.0 | -12.6 | 4.38 | 4.37 | -0.01 |
| Latvia | 3.97 | 4.02 | 0.05 | 42.6 | 35.0 | -7.6 | 4.48 | 4.79 | 0.31 |
| Lithuania | 4.17 | 3.97 | -0.20 | 52.3 | 42.6 | -9.7 | 4.24 | 4.73 | 0.49 |
| Poland | 4.16 | 4.02 | -0.14 | 38.4 | 38.7 | 0.3 | 4.30 | 4.66 | 0.35 |
| Romania | 3.51 | 3.66 | 0.15 | 57.7 | 43.2 | -14.5 | 4.14 | 4.38 | 0.24 |
| Slovakia | 4.22 | 3.56 | -0.67 | 51.0 | 48.6 | -2.4 | 4.56 | 4.35 | -0.21 |
| Slovenia | 4.22 | 3.82 | -0.41 | 39.4 | 32.0 | -7.4 | 4.24 | 4.60 | 0.36 |
| Germany | 6.19 | 5.09 | -1.11 | 57.7 | 48.8 | -8.9 | 5.09 | 5.05 | -0.04 |
| Spain | 4.70 | 4.15 | -0.55 | 59.1 | 58.2 | -0.9 | 4.41 | 4.47 | 0.06 |
| Sweden | 5.51 | 5.24 | -0.27 | 57.0 | 49.4 | -7.6 | 4.94 | 5.07 | 0.13 |
| UK | 6.01 | 5.18 | -0.83 | 35.5 | 33.7 | -1.8 | 5.43 | 5.34 | -0.09 |
| (d) | gci_tradeb | gci_forown | gci_busimp | ||||||
| Bulgaria | 4.27 | 4.10 | -0.16 | 4.23 | 4.04 | -0.19 | 3.86 | 3.78 | -0.08 |
| Croatia | 4.64 | 4.88 | 0.24 | 4.77 | 4.01 | -0.76 | 4.34 | 3.10 | -1.25 |
| Czech Republic | 5.30 | 4.65 | -0.65 | 5.94 | 6.02 | 0.08 | 5.67 | 4.98 | -0.70 |
| Estonia | 5.60 | 4.65 | -0.95 | 5.72 | 5.76 | 0.04 | 6.01 | 5.40 | -0.61 |
| Hungary | 5.60 | 4.54 | -1.06 | 5.93 | 5.26 | -0.67 | 5.72 | 4.65 | -1.07 |
| Latvia | 4.78 | 4.69 | -0.09 | 5.31 | 5.25 | -0.06 | 4.98 | 5.07 | 0.08 |
| Lithuania | 4.68 | 4.13 | -0.54 | 4.95 | 4.37 | -0.58 | 4.64 | 4.35 | -0.29 |
| Poland | 4.41 | 4.35 | -0.06 | 4.73 | 5.02 | 0.29 | 4.47 | 4.57 | 0.10 |
| Romania | 4.27 | 4.50 | 0.22 | 4.64 | 4.27 | -0.37 | 4.70 | 4.66 | -0.05 |
| Slovakia | 5.77 | 4.61 | -1.16 | 6.32 | 6.05 | -0.27 | 6.33 | 5.01 | -1.33 |
| Slovenia | 5.45 | 4.48 | -0.96 | 4.30 | 3.27 | -1.03 | 4.11 | 3.43 | -0.67 |
| Germany | 5.64 | 4.35 | -1.29 | 5.96 | 4.94 | -1.02 | 5.68 | 4.88 | -0.80 |
| Spain | 4.98 | 4.17 | -0.81 | 5.52 | 4.99 | -0.53 | 5.46 | 4.61 | -0.86 |
| Sweden | 5.89 | 4.65 | -1.24 | 6.00 | 5.10 | -0.90 | 5.75 | 5.49 | -0.26 |
| UK | 5.31 | 4.65 | -0.66 | 6.27 | 6.17 | -0.10 | 6.09 | 5.87 | -0.22 |
| (e) | gci_forcom | gci_com | gci_marsize | ||||||
| Bulgaria | 3.89 | 4.78 | 0.90 | 3.75 | 4.55 | 0.80 | 4.12 | 3.91 | -0.20 |
| Croatia | 4.34 | 4.67 | 0.33 | 3.98 | 4.25 | 0.27 | 3.85 | 3.59 | -0.26 |
| Czech Republic | 5.13 | 5.63 | 0.49 | 4.69 | 4.95 | 0.26 | 4.55 | 4.47 | -0.09 |
| Estonia | 5.33 | 5.78 | 0.45 | 5.03 | 5.29 | 0.26 | 3.36 | 3.09 | -0.27 |
| Hungary | 5.19 | 5.46 | 0.27 | 4.61 | 4.72 | 0.10 | 4.52 | 4.32 | -0.19 |
| Latvia | 4.69 | 5.35 | 0.66 | 4.54 | 4.95 | 0.41 | 3.49 | 3.24 | -0.24 |
| Lithuania | 4.55 | 5.13 | 0.59 | 4.33 | 4.86 | 0.53 | 3.78 | 3.61 | -0.17 |
| Poland | 4.27 | 4.96 | 0.69 | 4.30 | 4.73 | 0.43 | 5.06 | 5.16 | 0.10 |
| Romania | 3.73 | 4.80 | 1.07 | 4.04 | 4.48 | 0.44 | 4.58 | 4.57 | -0.01 |
| Slovakia | 5.51 | 5.63 | 0.13 | 4.85 | 4.76 | -0.09 | 4.16 | 4.03 | -0.14 |
| Slovenia | 4.49 | 4.89 | 0.40 | 4.31 | 4.69 | 0.38 | 3.67 | 3.39 | -0.28 |
| Germany | 4.99 | 4.97 | -0.03 | 5.07 | 5.03 | -0.04 | 6.00 | 6.02 | 0.02 |
| Spain | 4.70 | 4.73 | 0.02 | 4.47 | 4.52 | 0.06 | 5.52 | 5.42 | -0.10 |
| Sweden | 5.10 | 5.25 | 0.15 | 4.98 | 5.11 | 0.13 | 4.64 | 4.64 | -0.01 |
| UK | 5.04 | 5.34 | 0.30 | 5.35 | 5.34 | -0.02 | 5.83 | 5.74 | -0.08 |
| (f) | gci_compind | wdi_costbusi | wdi_taxpaym | ||||||
| Bulgaria | 3.98 | 4.32 | 0.34 | 9.6 | 0.7 | -8.9 | 29 | 14 | -15 |
| Croatia | 4.16 | 4.07 | -0.09 | 12.7 | 3.3 | -9.4 | 40 | 19 | -21 |
| Czech Republic | 4.67 | 4.69 | 0.02 | 9.5 | 6.7 | -2.8 | 27 | 8 | -19 |
| Estonia | 4.82 | 4.74 | -0.09 | 6.2 | 1.3 | -4.9 | 7 | 8 | 1 |
| Hungary | 4.49 | 4.25 | -0.25 | 22.4 | 7.3 | -15.1 | 13 | 11 | -2 |
| Latvia | 4.47 | 4.45 | -0.02 | 4.2 | 1.5 | -2.7 | 29 | 7 | -22 |
| Lithuania | 4.49 | 4.55 | 0.06 | 3.3 | 0.6 | -2.7 | 11 | 11 | 0 |
| Poland | 4.39 | 4.49 | 0.11 | 19.9 | 12.2 | -7.7 | 41 | 7 | -34 |
| Romania | 3.98 | 4.32 | 0.34 | 5.3 | 2.0 | -3.3 | 108 | 14 | -94 |
| Slovakia | 4.54 | 4.22 | -0.32 | 5.0 | 1.5 | -3.5 | 32 | 10 | -22 |
| Slovenia | 4.48 | 4.28 | -0.20 | 12.0 | 0.0 | -12.0 | 22 | 10 | -12 |
| Germany | 5.48 | 5.53 | 0.05 | 4.7 | 1.8 | -2.9 | 12 | 9 | -3 |
| Spain | 4.70 | 4.59 | -0.11 | 16.5 | 5.2 | -11.3 | 8 | 9 | 1 |
| Sweden | 5.44 | 5.43 | -0.01 | 0.7 | 0.5 | -0.2 | 6 | 6 | 0 |
| UK | 5.56 | 5.43 | -0.13 | 0.7 | 0.1 | -0.6 | 8 | 8 | 0 |
| (g) | wdi_timeenfor | wdi_timeregpro | wdi_timestartbu | ||||||
| Bulgaria | 564 | 564 | 0 | 19 | 11 | -8 | 32 | 18 | -14 |
| Croatia | 561 | 572 | 11 | 956 | 62 | -894 | 29 | 12 | -17 |
| Czech Republic | 653 | 611 | -42 | 124 | 31 | -93 | 40 | 15 | -25 |
| Estonia | 425 | 425 | 0 | 51 | 18 | -33 | 35 | 4 | -32 |
| Hungary | 335 | 395 | 60 | 78 | 17 | -61 | 38 | 5 | -33 |
| Latvia | 279 | 469 | 190 | 55 | 17 | -39 | 16 | 6 | -11 |
| Lithuania | 210 | 300 | 90 | 3 | 3 | -1 | 26 | 4 | -23 |
| Poland | 980 | 685 | -295 | 195 | 33 | -162 | 46 | 30 | -16 |
| Romania | 537 | 512 | -25 | 77 | 19 | -58 | 11 | 8 | -3 |
| Slovakia | 565 | 705 | 140 | 17 | 17 | -1 | 27 | 12 | -16 |
| Slovenia | 1350 | 1160 | -190 | 391 | 50 | -342 | 60 | 6 | -54 |
| Germany | 394 | 429 | 35 | 40 | 39 | -1 | 22 | 11 | -12 |
| Spain | 515 | 510 | -5 | 20 | 13 | -8 | 70 | 14 | -56 |
| Sweden | 508 | 321 | -187 | 15 | 14 | -1 | 16 | 7 | -9 |
| UK | 404 | 437 | 33 | 42 | 22 | -20 | 12 | 5 | -8 |
| (h) | wdi_timepaytax | eur_enterman | eur_entertot | ||||||
| Bulgaria | 586 | 423 | -163 | 4 042 | 4 142 | 99 | 36 932 | 43 247 | 6 314 |
| Croatia | 232 | 206 | -26 | 5 428 | 4 858 | -570 | 37 725 | 34 454 | -3 271 |
| Czech Republic | 930 | 405 | -525 | 14 613 | 15 949 | 1 335 | 87 368 | 94 038 | 6 671 |
| Estonia | 81 | 81 | 0 | 4 097 | 4 841 | 744 | 37 818 | 47 504 | 9 686 |
| Hungary | 340 | 277 | -63 | 5 613 | 4 799 | -814 | 57 115 | 50 524 | -6 590 |
| Latvia | 280 | 193 | -87 | 3 439 | 4 739 | 1 299 | 35 324 | 48 256 | 12 932 |
| Lithuania | 166 | 171 | 5 | 4 930 | 5 450 | 520 | 43 620 | 51 815 | 8 195 |
| Poland | 420 | 271 | -149 | 4 974 | 4 585 | -389 | 40 824 | 39 259 | -1 565 |
| Romania | 190 | 159 | -31 | 2 790 | 2 340 | -450 | 24 657 | 21 825 | -2 832 |
| Slovakia | 325 | 188 | -137 | 1 502 | 11 676 | 10 174 | 11 657 | 72 635 | 60 979 |
| Slovenia | 260 | 245 | -15 | 8 581 | 8 810 | 229 | 53 275 | 61 536 | 8 261 |
| Germany | 196 | 218 | 22 | 2 380 | 2 469 | 89 | 22 973 | 26 702 | 3 729 |
| Spain | 298 | 158 | -140 | 4 515 | 3 624 | -892 | 61 241 | 50 514 | -10 727 |
| Sweden | 122 | 122 | 0 | 5 895 | 5 592 | -303 | 62 998 | 69 053 | 6 055 |
| UK | 105 | 110 | 5 | 2 133 | 1 995 | -138 | 28 000 | 27 786 | -213 |
[i] Source Own calculations based on the data from Heritage Foundation, World Economic Forum, World Bank, and Eurostat.
Figure 1
The comparison of Bulgaria with reference countries in the area of product market competition.
Source: Own calculations.
Table 3
Similarity coefficients in the area of product market competition
| CEE country | Reference country | |||
|---|---|---|---|---|
| Germany | Spain | Sweden | UK | |
| (a) Initial year | ||||
| Bulgaria | 37.4 | 54.0 | 35.1 | 35.4 |
| Croatia | 43.0 | 58.7 | 43.7 | 39.7 |
| Czech Republic | 59.5 | 70.5 | 66.3 | 52.2 |
| Estonia | 68.8 | 70.3 | 71.2 | 69.0 |
| Hungary | 66.8 | 81.7 | 71.7 | 56.4 |
| Latvia | 58.4 | 71.4 | 58.4 | 56.5 |
| Lithuania | 56.5 | 71.8 | 59.5 | 51.1 |
| Poland | 47.0 | 70.0 | 47.1 | 43.8 |
| Romania | 46.5 | 59.3 | 45.4 | 40.7 |
| Slovakia | 65.9 | 67.2 | 65.2 | 61.1 |
| Slovenia | 43.9 | 68.5 | 48.2 | 45.2 |
| Mean | 54.0 | 67.6 | 55.6 | 50.1 |
| (b) Final year | ||||
| Bulgaria | 43.3 | 65.2 | 37.7 | 35.9 |
| Croatia | 40.7 | 56.5 | 34.5 | 35.5 |
| Czech Republic | 56.5 | 64.3 | 55.5 | 54.1 |
| Estonia | 65.6 | 64.4 | 72.8 | 73.2 |
| Hungary | 55.1 | 72.5 | 58.3 | 51.2 |
| Latvia | 62.0 | 70.2 | 67.0 | 65.3 |
| Lithuania | 59.3 | 72.8 | 60.8 | 54.3 |
| Poland | 62.8 | 73.4 | 53.1 | 53.6 |
| Romania | 55.5 | 70.9 | 48.2 | 49.0 |
| Slovakia | 51.7 | 67.6 | 56.3 | 50.6 |
| Slovenia | 50.5 | 60.3 | 52.4 | 44.5 |
| Mean | 54.8 | 67.1 | 54.2 | 51.6 |
[i] Gray cells indicate the reference country to which the CEE country is most similar. If the difference is less than 3 percentage points compared to other reference countries, the gray color includes the larger group of countries including all countries for which the difference from the leader is less than 3 percentage points.
Source Own calculations.
Figure 2
The comparison of Croatia with reference countries in the area of product market competition.
Source: Own calculations.
Figure 3
The comparison of the Czech Republic with reference countries in the area of product market competition.
Source: Own calculations.
Figure 4
The comparison of Estonia with reference countries in the area of product market competition.
Source: Own calculations.
Figure 5
The comparison of Hungary with reference countries in the area of product market competition.
Source: Own calculations.
Figure 6
The comparison of Latvia with reference countries in the area of product market competition.
Source: Own calculations.
Figure 7
The comparison of Lithuania with reference countries in the area of product market competition.
Source: Own calculations.
Figure 8
The comparison of Poland with reference countries in the area of product market competition.
Source: Own calculations.
Figure 9
The comparison of Romania with reference countries in the area of product market competition.
Source: Own calculations.
Figure 10
The comparison of Slovakia with reference countries in the area of product market competition.
Source: Own calculations.
Figure 11
The comparison of Slovenia with reference countries in the area of product market competition.
Source: Own calculations.