Relationship between sectors competitiveness and export to income ratio: the case of Lithuanian manufacturing industry

LTReikšminiai žodžiai: Apdirbamoji pramonė; Konkurencingumas; Konkurencingumo indeksas; Konkurencingumo veiksniai; Eksportas; Manufacturing industry; Competitiveness; Competitiveness index; Factors of competitiveness; Export.

ENPurpose of the article. The purpose of this article is to evaluate competitive situation of largest Lithuanian manufacturing sectors and identify relationship between competitiveness of the manufacturing companies and export to income ratio. Methodology/methods. To evaluate competitiveness of companies in Lithuanian manufacturing sector composite competitiveness index was developed. Composite index includes key indicators, qualifying the actual performance and competitiveness of manufacturing companies, such as labor productivity per employee, gross margin, average monthly wages per employee, labor efficiency, ratio of investment into machinery and gross profit. Relationship between competitiveness index of the analyzed sectors and their export to income ratios were established with the help of scatter graph and correlation coefficient. Scientific aim Aim of the research is to determine whether companies in Lithuanian manufacturing sector, which generate higher income from activities in foreign markets, possess competitive advantage over companies, realizing most of their production in local market.Findings. Competitiveness index indicated that advantage in separate manufacturing sectors is determined by specifications of their activities and nature of the operations. Scatter graph did not display a linear relationship between competitiveness index and export to income ratio. Nevertheless, sectors, generating either very large or very small shares of their income in foreign markets (compared to other Lithuanian manufacturing sectors), encounter higher operation risks. Because of this reason values of their competitiveness indexes stand out as having largest and smallest values. Conclusions In order to secure a stable competitive situation companies in Lithuanian manufacturing industry are required to diversify their operating activities by ensuring income streams from several different markets. Companies, which concentrate their operations mainly in a single environment, may face greater risks of deteriorating results in case of unanticipated economical or political occurrences. To further verify these conclusions examination of larger data volume is required. [From the publication]