How competitive is Russian economy?
Introduction
Russian economy has been studied by numerous international organizations, academics, and other analysts. And consequently there are strongly divergent views about the state of Russian competitiveness. Strong economic growth, fiscal surpluses, and reforms in some areas of the business environment are compared with huge continuing challenges in doing business in Russia as well as rising government intervention in the market, especially in energy. This mixed evidence has been interpreted very differently. Within Russia (including many foreign companies operating in the country), there is optimism about the progress of the nation s economy. Outside of Russia, there is deep scepticism about whether the current economic success of Russia extends beyond high oil prices, and whether the increasing concentration of economic (and political) power in the central government has changed the course of Russia s reforms for the worse. There is some truth in each of these perspectives, but a deeper analysis is needed to truly understand where Russia stands and to guide future policy.
In this coursework it will be proved that modern Russia has no inherent reason for not entering a period of high and sustained growth and that it can join the ranks of the most competitive economies in the world in the near future.
The coursework is organized in three sections. First, the assessment of Russia s current competitiveness is presented, highlighting the roles of the country s legacy, its broad economic context, microeconomic conditions, and current market structure. Second, the evaluation of Russia s economic performance on micro level is introduced with description of current market structure's effect on business environment. This part also introduces overall performance assessment. Third, the competitiveness of Russian economy on the global arena is presented and broadly evaluated.
1. Theoretical background to the market structure and competition
1.1 Concept of competitiveness and competition
endowment russian economy
Competitiveness can be defined at the firm level, the industry level, and the national level. At the firm level, competitiveness is the ability to provide products and services more effectively and efficiently than relevant competitors. This includes sustained success in international markets without protection or subsidies.the industry level, competitiveness is the ability of the nation s firms to achieve sustained success versus foreign competitors, without protection or subsidies.the national level, competitiveness means the citizens ability to achieve a high, and constantly rising, standard of living. In most countries, the standard of living is determined by productivity, which deploys national resources and the output of the economy per unit of labour and/or capital employed.
Competition in economics is the rivalry between two or more businesses to gain as much of the total market sales or customer acceptance as possible. It helps to maintain reasonable prices, provides consumers with new and improved products, forces businesses to operate efficiently and results in a wide selection of products from which to choose.was described by Adam Smith in The Wealth of Nations (1776) and later economists as allocating productive resources to their most highly-valued uses and encouraging efficiency. Smith and other classical economists before Cournot were referring to price and non-price rivalry among producers to sell their goods on best terms by bidding of buyers, not necessarily to a large number of sellers nor to a market in final equilibrium.microeconomic theory distinguished between perfect competition and imperfect competition, concluding that no system of resource allocation is more Pareto efficient than perfect competition. Competition, according to the theory, causes commercial firms to develop new products, services and technologies, which would give consumers greater selection and better products. The greater selection typically causes lower prices for the products, compared to what the price would be if there was no competition (monopoly) or little competition (oligopoly).
1.2 Models of Competition
classify markets according to conditions that prevail in them. They determine market structure, or the nature and degree of competition among firms operating in the same market. E...
