Regional competitiveness in the European Union: The role of individual and institutional factors

Abstract

While it is generally believed that the basic unit of territorial competitiveness is the firm, existing country level and regional competitiveness measures focus on the widely interpreted institutional aspects of competitiveness and neglect individual (firm) level characteristics. The theoretical concepts are also separated. One can find institutional and individual theories, but they are not related to each other. Popular competitiveness indices are based on institutional factors. Reflecting to this contradiction, we have created a new index that combines institutional aspects and individual competencies in a systemic way to measure regional competitiveness more correctly (highlights SME sector).