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Business & Economics

Evaluation of Competitiveness of Lithuanian Economic Sectors Using Competitiveness Indices: Impact of European Union Funding
Sigita Balzaraviciene, Vaida Pilinkiene

ABSTRACT. The article aims at proving or disproving the hypothesis, whether EU structural funding policy is actually having an effect and is contributing to one of its objectives – raising competitiveness of the funded sectors. As a result, this research provides three competitiveness indices and discusses on how the competitiveness of three Lithuanian sectors is or is not affected by a purposive EU funding for each sector. The empirical research is constructed in two steps: (i) creating a composite index of each of three economic sectors and (ii) testing the causality between EU funding and sector’s competitiveness index.

Findings of empirical research support the EU funding policy objective oriented towards raising competitiveness. The change in EU funding was found to have statistically significant explanatory power over change of competitiveness level of tourism and agriculture, forestry & fisheries sectors. The article contributes to the research field by providing competitiveness index structure for agriculture, forestry & fisheries sector which might suggest ideas or contribute as a starting point for further professional empirical studies. It also contributes to the field by applying methodology of building competitiveness index for primary, tertiary and quaternary sectors of economy. General methodological approach used in this article could be also applied in other studies that evaluate an impact of one or few economic variables (or policy measures) on the competitiveness of economic sector.

KEYWORDS: competitiveness, EU structural funds, competitiveness index, Granger causality.

JEL classification: C49, F15, L19.