THE POLISH PROCESSING INDUSTRY IN THE COMPETITION WITH EU MARKET: FACTORS AND EFFECTS
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This paper aims at analyzing the factors and effects of competition between Polish and European manufacturing goods on the enlarged EU market. The changes and differentiation of the quality of goods exported by Poland vis a vis their European counterparts are explored. The analysis focuses on showing which of the goods - in terms of quality - exported by Poland increased the competitive pressure on the European products. The factors of these changes (productivity, wages and quality enhancements) are also investigated. The subject of the analysis are Polish manufacturing industries related to their European counterparts and their competition in the years 1996 - 2003. The competitive pressure is measured with changes in the shares of Polish manufacturing exports to the EU15 in EU25 internal exports. Its factors are next identified (using a multinomial logit model) and explored, relating to a Schumpeterian approach.The research revealed a rise in competitiveness of Polish manufacturing industries in the analyzed period, due to an improvement in quality and productivity measured with relative unit labour costs. The increase in Polish export shares in the EU market reflected not only the process of taking over the increase in EU demand, but also the process of pushing out the European competitors. However, these changes varied substantially across time and industries. A decrease in the gap in labour productivity of Polish and EU manufacturing was the main source of a rise in competitiveness of the former.
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