The relationship between competition policy and competitiveness

• Author: Dobre Claudia
• Position: Associated Professor, PhD, 'Ovidius' University, Constanta
• Pages: 87-91

THE RELATIONSHIP BETWEEN COMPETITION POLICY AND

COMPETITIVENESS

Claudia Dobre

Associated Professor, PhD, “Ovidius” University, Constanţa

dobre_claudia@yahoo.com

Abstract. The turbulent start of the new century has brought new challenges for firms,

industries and countries. Success in such times is demanding new perspectives on competitiveness.

Despite Romania experience of 10 years of anticompetitive practices legislation, despite of the

legislation upgrading to the European standards and to the institutional convergence with the EU

in the last years, despite even the positive economic dynamism in the last years, the effectiveness of

competition policy implementation is rather low. This paper seeks to analyse the need and

relevance of having a competition policy, its benefits, and the necessary amendments which need to

be made, so as to arm the economy and the government with a competent institutional mechanism

to tackle the emerging challenges.

Key words: competitiveness, competition policy, market distortion

Introduction

Competitiveness is that which measures firms’ ability to efficiently create useful services

and products, within a globalized environment, in a way that betters the life quality level and that of

employment. A steady competition with favourable positions for enterprises is a key factor in the

growth of productivity and competitiveness. Competition is thus, not a purpose within itself, but a

vital process of the market, which rewards enterprises with the utmost attractive prices, the best

quality, or that brings new products on the market, and with that the possibility of having a wider

range of products to choose from. As Neelie declares, by competitiveness we understand the

situation in which some companies supply goods and services, at reasonable cost

and other

companies or nations wish to buy (Kroes N., 2005). The test for competitiveness is now of course

the market which today means the European or global market.

The determiners of global competitiveness define the context in which companies are born

and compete separately, but also in a synergic manner. This climate requires and offers the

necessary resources and knowledge to fuel a certain the competitive trumps of certain sectors; the

information that indicate the opportunities to be considered; the direction in which the production

factors must be assigned; the objectives that must be aimed by shareholders, managers and

employees and, not lastly, the pressures and threats to which companies are subject to in order to be

flexible and innovative.

Companies obtain competitive advantage where the location of their activity allows for the

achievement of proper actives and specializes in knowledge accumulations, where they promptly

and suggestively receive information about the market’s requirements, where the goals of owners,

managers and workers converge into durable investments; where the macro-economical climate is

more dynamic and provocative (Miron D., 2003). By the words of M. Porter, companies succeed

“where the national diamond is most favourable”.( Porter M., 1993)

The more complex and the more dynamic a country’s economical background is, the more

likely it is that some companies fail if they do not internalize and capitalize according to its

requests.

The companies competitiveness relies on several factors, some controllable others not. The

external factors, they cannot: (Dobre I.C., 2007)

- the internal rate of the inflation and its relation to other countries’ inflation rates – the higher

the rate the less competitive the goods;