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Comparative Price Levels of New EU Member Countries

Author

Listed:
  • Taušer Josef

    (University of Economics, Prague)

  • Žamberský Pavel

    (University of Economics, Prague)

  • Čajka Radek

    (University of Economics, Prague)

Abstract

This article analyzes comparative price levels of 10 new EU member countries from Central, East, and South-East Europe and discusses their main determinants. A comparison of comparative price levels is logically followed by a comparison of relative GDP per capita in purchasing power parities. Further, the Balassa-Samuelson efect is theoretically explained and empirically tested using a sample of EU27 countries (excluding Luxemburg). The results of simple regression analysis confrm that diferences in comparative price levels can be explained by the diferences in relative GDP per capita in purchasing power parities. Besides the Balassa-Samuelson efect there are, however, many other factors that have an impact on comparative price levels. Tey are related to the lower competitiveness of domestic companies on international markets as the result of such factors as a lower quality of production, inefcient organizational structures and management styles, insufcient marketing and business skills, or a poor approach to international distribution channels.

Suggested Citation

  • Taušer Josef & Žamberský Pavel & Čajka Radek, 2013. "Comparative Price Levels of New EU Member Countries," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 39(1), pages 9-17, September.
    • Handle: RePEc:vrs:ijomae:v:39:y:2014:i:1:p:9-17:n:1
    DOI: 10.2478/ijme-2014-0018
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    Cited by:

    1. Adriana Grenčíková & Marcel Kordoš & Vladislav Berkovič, 2020. "The Impact of Industry 4.0 on Jobs Creation within the Small and Medium-Sized Enterprises and Family Businesses in Slovakia," Administrative Sciences, MDPI, vol. 10(3), pages 1-20, September.

    More about this item

    Keywords

    Price convergence; comparative price levels; European Union; Balassa-Samuelson efect;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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