A Lipowski
ABSTRACT
The purpose of this study is to develop a concept of market rivalry between firms for customers to clarify the mechanism of the competitiveness of production. The issue is to be able to research the impact of competitiveness upon consumers' welfare and economic growth. Simultaneously, the concept will be useful in critical analysis of micro-economic competition theory. The method is based on modelling the struggle basing upon precisely defined, unorthodox initial assumptions of struggle and assumptions concerning the structure of struggle dynamics. The results are the following theses: (a) the struggle between firms for customers is a necessity in case firms for demand-related reasons hold of the production capacity reserves, and their product is diversified; (b) the dynamics (growth, stability, decline) of production competitiveness depends upon the objective of the struggle between firms (maximalist, minimalist) and effectiveness in the implementation of such objective; (c) the dynamics (growth, stagnation) of production efficiency depends upon what type of struggle - offensive or defensive - prevails in the economy; (d) a company may achieve growth in production competitiveness without improving its production efficiency; (e) under the conditions of an open world market, offensive struggle method is more probable than in case of a closed national market. Concluding: the impact of production competitiveness upon consumer welfare and potential GDP growth is indirect - as the object of struggle between the firms for customers, the consequence of which is a pre-determined dynamics of production efficiency. However, acting as a factor determining the share of supply in the world market - competitiveness (international) bears direct impact upon the growth rate of actual GDP.