Competitive Environment and its Impact on Business Climate Development in a Region

The presented study examines the business climate of the Smolensk region, with applied developments based on the material of this region.

Aim. The study aims to characterize the specific features of ‘competitive environment’ as an economic category in the context of formation of a favorable business climate within the region.

Tasks. The authors analyze theoretical approaches to the definition of ‘competitive environment’ and ‘business climate’; assess the state of the competitive environment as a factor affecting the business climate in the region (through the example of the Smolensk region) with allowance for the competition intensity rating and survey of entrepreneurs; examine the implementation of government initiatives aimed at forming a favorable competitive environment in the Smolensk region; formulate proposals to improve the efficiency of implementation of measures by the local authorities of the Smolensk region aimed at forming a favorable competitive environment.

Methods. This study uses general scientific methods of cognition to examine the factors of formation of a favorable business climate in various aspects and to identify trends in the current state and development of entrepreneurship in the region.

Results. Analysis of measures taken by the authorities of the Smolensk region to implement a government competitive policy and qualitative assessment of the competitive environment in the region by the business community show that changes and adjustments to the regulatory framework are not introduced quickly enough, while entrepreneurs show a low level of awareness about the activities of the authorities in enhancing competition. A potential solution to this problem involves creating a Competition Development Project Office in the region, which would unite representatives of the authorities, including employees of the Office of the Federal Antimonopoly Service (OFAS) in the Smolensk region, natural monopolies, and entrepreneurs (by including representatives of associations and business communities). Establishment of such an office would make the decision-making more balanced and immediate, which would in turn improve the quality of the competitive environment in the Smolensk region.

Conclusions. The authors propose assessing the quality of the competitive environment, ranking regions, and including the results into the annual report of the Federal Antimonopoly Service (FAS) on the state of competition in Russia. Improvement of the business climate is identified as a priority for regional authorities. Therefore, monitoring and evaluation of the business climate and its factors is an essential task.

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