Vasil Petkov

Analysis of the Competitiveness of the Economies of Eastern Europe Vasil Petkov

In the modern global economy, fast technological progress and deepening globalization change radically the context of economic development. The conventional understanding of inherited factor endowments as a determinant of the comparative advantage of countries is replaced by the concept of competitive advantage, with investment in knowledge and technological innovation underlying them. Therefore, attaining stable national competitiveness is a difficult task requiring a lot more than passive opening to the free markets. After the disintegration of the former Eastern Bloc and the end of the Cold War, Eastern European countries embarked on a transition to market economy and an accelerated integration into the world economy. This process involves deep structural transformations and a complete change of the business environment. These changes offer transition countries huge opportunities for a considerable increase in the productivity of production factors and greater access to new resources and markets, while at the same time entailing a significant risk of economic lag.