The Impact of Institutional Environment on Slovak Enterprises and the Institutional Hysteresis Effect
Ladislav Bazo, Miroslava Cukanova, Laura Markovicova, Dusan Steinhauser
Keywords:
hysteresis effect, institutional environment, Slovak republic, business environment index, perception of
institutional quality
Abstract:
In recent years, a decline in competitiveness and in the quality of the business environment
measurements has been reflected in the Slovak Republic, as noted, for example, in the assessments
of the World Bank and the World Economic Forum, as well as in the business environment
index (BEI from Business Alliance of Slovakia PAS), data from which we have used in
our research. A multiple regression analysis along with the correlation analysis confirmed our
assumption that in the Slovak Republic a state of institutional hysteresis exists. The hysteresis
effect indicates rigidity despite the economic recovery, not restoring the original balance after a
certain failure in the economic process. In our case, many external environment subindeces tend
to decline while macroeconomic variables (employment, value added, R&D expenditures, revenues
from corporate taxes) grow. On the other hand, the internal factors of a company, through
which it itself affects the environment, such as the level of liquidity or innovation, is growing. We
conclude that the companies we examined have adapted. The process of improving the assessment
of the country (corruption, law enforcement, equality before the law, functioning of the
judiciary) will become much more expensive over time. The result of this change should be an
entrepreneurial environment in which the entrepreneur does not have to deal with the ongoing
optimization of taxes and levies, a condition which in the long run would lead to the economic
recovery in the Slovak Republic and to improvements in competitiveness.
Fulltext download:
 The Impact of Institutional Environment on Slovak Enterprises and the Institutional Hysteresis Effect [PDF file] [Filesize: 706.99 KB]
 10.7441/joc.2019.03.03
Bazo, L, Cukanova, M., Markovicova, L., & Steinhauser, D. (2019). The Impact of Institutional
Environment on Slovak Enterprises and the Institutional Hysteresis Effect. Journal of Competitiveness,
11(3), 35–52. https://doi.org/10.7441/joc.2019.03.03
|
