Question

The impact of factor that often influences productivity and Competitiveness?

Answer 1

Factors affecting productivity and competitiveness :

1) relative inflation rate

If rate of inflation is relatively lower as compared to other countries then the firm becomes more competitive as goods will increase slowly over a period of time .

2) productivity :

Productivity refer to output per input. The most important part of productivity is labor productivity . High labour productivity will help to produce more goods at low rate and in less time which will increase competitiveness of firm and increase profit for the firm .

3) taxes :

Tax on labour , firm and input will affect competitiveness and productivity of goods .high tax rate will lead to increase in price of good as unit cost of good increases which leads to low competitiveness.

4) cost of business :

Cost of doing business affects competitiveness of the firm.when labaour ruless and regulation is tough enough then in that country productivity is low and competitiveness is also low.

5) infrastructure :

Infrastructure in country also affect competitiveness of the firm. Countries is low infrastructure cannot be competitive enough as cost of transport is high enough which rises cost of input .