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Differentiation of changes in competitiveness among Polish manufacturing industries

By Iga Magda and Anna Wziatek-Kubiak

Abstract

This paper aims to show the uneven process of changes in competitiveness across Polish manufacturing industries during the period prior to Poland's EU membership (1996-2003). Based on the Schumpeterian approach to competitiveness, that is the ability to compete, it looks at changes in competitiveness as effects of competition and its factors. Using two types of measure, four clusters of Polish manufacturing industries are selected: double winners, export-led industries, export-oriented industries and losers. The analysis shows that the use of EU market share as a measure of changes in competitiveness fails to reveal differentiation in levels and changes in relative productivity in those industries that increased their EU market share. It also shows that the larger the initial differences in labour productivity across industries, the stronger the process of differentiation of changes in competitiveness. Systemic transition and external liberalisation are conducive to improvement in the competitiveness of highly productive industries, but create a weak stimulus for improvement in the competitiveness of the most backward ones. Secondly, the higher the investment rate and its dynamics, the larger the increase in competitive pressure on the EU market. This conclusion is of great importance for Polish manufacturing, all of the more so given that the potential to reduce employment seems to have been largely exhausted and investment intensity has dropped considerably, especially since 1998.competitiveness, productivity, transition economies, manufacturing industry, EU integration

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