Defining competitiveness through the theories of new economic geography and regional economy

Abstract

The subject of work is defining competitiveness through a multidisciplinary approach of the theories of new economic geography and regional economy. The paper describes in detail the theory of competitiveness, defined by numerous authors in this area, with special emphasis on the opposing views of Michael Porter and Paul Krugman. A regional competitiveness that is colsely related to economic geography and regional economy, the development of regional economy and typology of regions have been defined in the work. One of the first authors that stressed the importance of geographical location was Michael Porter. In his model called " diamond " , the author emphasizes that geographical concentration of a business enhances the productivity, innovativity and sector export. After this theory, many authors have foccussed on the location problem research, which resulted in better interconnection of economy and geography. As the result of such activities, new directions have been developed, such as the new theory of economic geography and regional economy. New economic geography has been mentioned mostly in connection with the Nobel Prize winner, Paul Krugman, whose theories are often opposed to Porter's ones. Krugman had the most credit for the development of New Economic Geography. At the end of the work, the differences between comparative and competitive adventages were explained.