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RESEARCH PRODUCT

Drivers of Competitiveness in European High-Tech Industries

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Our paper builds on the importance of high-tech manufacturing and knowledge-intensive services as significant competitiveness and economic growth drivers in the European Union and offers a fresh approach of the study on the competitiveness of secondary and tertiary high-tech industries across EU member states. Our analysis covers the 2008–2015 period and includes twelve old and new EU members. We opt for a balanced panel data approach in OLS and ARIMA frameworks to investigate the competitiveness of high-technology industries in the EU with the aim of uncovering the nature of the main explanatory factors behind their performance. Our results show that the number of persons employed and the investment rate are both determinants of labour productivity and business profitability, while turnover and personnel costs have a specific influence on productivity and profitability, respectively. The GDP level and the percentage of population with tertiary education are the most significant location-related drivers for high-tech industries’ competitiveness. Overall, industry-related factors are more important for explaining the competitiveness of high-tech sectors compared to location-related factors, while external factors have a marginal impact on high-tech industries’ performance.