Assessment of competitive environment in the region’s economy

Abstract

An effective state policy on development of competition in a region’s economy must be based on scientific research analyzing conditions of market competitive environment. The lack of a universal technique for assessing competitive environment in regional economy is a significant shortcoming of both scientific research in the field and the policy pursued in the sphere of competitive relations management. At the same time, when monitoring market competitive conditions, antimonopoly authorities of the Russian Federation use two indicators of market share calculation – concentration ratio (CR-N) and Herfindahl – Hirschman index. The purpose of this article is to assess competitive relations in the region's economy. The approach is based on the application of the coefficient CR-N. In contrast to the formula for CR-N calculation, where shares of the largest companies are used, we calculated the coefficient reflecting the concentration of small businesses. The number of organizations and product sales revenue were chosen as physical and cost indexes. The novelty of the offered approach consists in a new understanding of the competitive environment development process, resulting in increase of the market share of small enterprises but not in decrease of large enterprises concentration. Approbation of the offered approach was carried out through the example of the Vologda region. The assessment was performed for different branches of economy. While assessing the physical indicator, it was revealed that in 2013the most developed competitive environment was in retail trade, in hotel and restaurant industry, in textile and sewing production. According to the cost index calculation, the most competitive relations were recorded in leather and footwear production, rubber and plastic products manufacturing, in hotel and restaurant industry, etc. The conclusion to be drawn is that the assessment conducted can be put into practice and there is a necessity for working out a diagnostic technique to analyze the level of competitive environment development in the region’s economy on the basis of highly informative and objective indicators.