Competitiveness of regions based on comparative advantage

In a globalizing economy, the concept of competitiveness applied on a regional level has become frequently discussed issue. Variables of competitiveness can be divided into inputs, which represent comparative advantages of regions, and into outputs, which represent final competitiveness. The main objective of the paper is the multidimensional evaluation of competitiveness of selected EU regions according to their comparative advantages. The basic concept of regional competitiveness and comparative advantage is explained in the theoretical part of the paper. The second part is focused on the reduction of inputs' dimension and on a creation of new immeasurable factors of comparative advantages by using factor analysis. In the last part a multivariate classification of regions is realised based on created factors of comparative advantages through cluster analysis. Data for analysis are obtained from informative database of Eurostat. Compiled database contains a wide range of variables, which cover not only economic, but also social, demographic, technological and research fields. 16 variables, standing on the side of inputs. Analyses are made for year 2010, using software Statgraphics, SAS and GIS. We are focusing on comparison of 84 regions of Central European countries according their comparative advantages (8 Czech regions, 30 German regions, 7 Hungarian regions, 9 Austrian regions, 16 Poland regions, 8 Romanian regions, 2 Slovenian regions and 4 Slovak regions). In term of comparative advantages of regions, the most important factor is "The quality of human potential". This factor is created mainly from Gross fixed capital formation, Total intramural R&D expenditure, Total R&D personnel, Total R&D researchers, Human resources in science and technology, Population aged 25-64 with tertiary education attainment. According to results, the most effective way how to improve comparative advantages of regions is to invest more funds in research, science and technology and higher education. On the base of multivariate classification of selected regions, the significant differences between regions are found. Great differences are especially between capital regions and other regions of Slovak Republic, Czech Republic and Romania. The most competitive regions according comparative advantages are German regions, situated in cluster "The best labour market and the highest innovative potential". 6 Romanian regions, situated in cluster "The lowest quality of human capital, the worst demography and the highest employment in agriculture, forestry and fishing" are least competitive.