<abstract xmlns="http://www.w3.org/1999/xhtml"><p>This article analyzes comparative price levels of 10 new EU member countries from Central, East, and South-East Europe and discusses their main determinants. A comparison of comparative price levels is logically followed by a comparison of relative GDP per capita in purchasing power parities. Further, the Balassa-Samuelson efect is theoretically explained and empirically tested using a sample of EU27 countries (excluding Luxemburg). The results of simple regression analysis confrm that diferences in comparative price levels can be explained by the diferences in relative GDP per capita in purchasing power parities. Besides the Balassa-Samuelson efect there are, however, many other factors that have an impact on comparative price levels. Tey are related to the lower competitiveness of domestic companies on international markets as the result of such factors as a lower quality of production, inefcient organizational structures and management styles, insufcient marketing and business skills, or a poor approach to international distribution channels.</p></abstract>

This article analyzes comparative price levels of 10 new EU member countries from Central, East, and South-East Europe and discusses their main determinants. A comparison of comparative price levels is logically followed by a comparison of relative GDP per capita in purchasing power parities. Further, the Balassa-Samuelson efect is theoretically explained and empirically tested using a sample of EU27 countries (excluding Luxemburg). The results of simple regression analysis confrm that diferences in comparative price levels can be explained by the diferences in relative GDP per capita in purchasing power parities. Besides the Balassa-Samuelson efect there are, however, many other factors that have an impact on comparative price levels. Tey are related to the lower competitiveness of domestic companies on international markets as the result of such factors as a lower quality of production, inefcient organizational structures and management styles, insufcient marketing and business skills, or a poor approach to international distribution channels.

Comparative Price Levels of New EU Member Countries

International Journal of Management and Economics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Comparative Price Levels of New EU Member Countries"}

This article analyzes comparative price levels of 10 new EU member countries from Central, East, and South-East Europe and discusses their main determinants. A...

Comparative Price Levels of New EU Member Countries

Published Online: Oct 17, 2014

Page range: 9 - 17

DOI: https://doi.org/10.2478/ijme-2014-0018

Keywords
Price convergence, comparative price levels, European Union, Balassa-Samuelson efect

© 2013 Josef Taušer et. al.

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Comparative Price Levels of New EU Member Countries

Published Online: Oct 17, 2014

Page range: 9 - 17

DOI: https://doi.org/10.2478/ijme-2014-0018

KeywordsPrice convergence, comparative price levels, European Union, Balassa-Samuelson efect

© 2013 Josef Taušer et. al.

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
Price convergence, comparative price levels, European Union, Balassa-Samuelson efect