QUANTITATIVE-ANALYSIS OF THE STATE OF COM PETITION IN THE FURNITURE BRANCH IN THE SLOVAK REPUBLIC

In compliance with the transformation of the Slovak economy into a mar ket economy type, a number of urgent and important tasks related to th e new principles of operation of the market economy mechanism had to b e solved. The existence of the market structure of imperfect competiti on is linked as a rule with the direct and hidden effects affecting ne gatively the implementation of economic competition. The observance of conditions for economic competition is monitored institutionally in t he EU countries and other developed countries of the world and one asc ribes great importance to this item of economic development. The prote ction of economic competition in the Slovak Republic and related tasks are insured by the Anti-Monopoly Office of the Slovak Republic. This Office during its relatively short existence has fixed its attention f irst on the preparation and then to the guarantees of adherence to Law No 188/94 ''On the Protection of Economic Competition''. While solvin g the whole series of tasks related to the evaluation of the status of competition background in the branches of Slovak economy, the Departm ent of Analyses of the Anti-Monopoly Office of the Slovak Republic sta rted in 1996 the solution of how to propose and experimentally test me thods applicable for quantitative analysis of the status of competitio n background within the branches of the economy of the Slovak Republic .The paper presents possibilities of exploitation of model approaches, mathematical and economics methods and computer techniques for the ev aluation of competition background in the branches of the Slovak natio nal economy. Basic terms of methods to measure the concentration in in dividual branches are presented. The indicators of economical effectiv eness of individual enterprises are characterized. Selected quantifica tion methods of the degree of concentration, e.g. indicators of absolu te and relative concentration implemented in presented case study, are explained. The values of indicators for extreme cases of the degree o f concentration in the industry branch are quoted. Measurement of Conc entration in the Branch - Problems of Methodology Development and the degree of concentration in an industry branch is an essential factor t hat defines the level of competition background; its exact demarcation is based on the system of quantitative characteristics included in an alytical materials of State institutions that inspect adherence to the rules of economic competition in the majority of developed economies. This phenomenon of economic analyses will be fundamentally significan t for Slovakia in the near future because of the expected formal and i nstitutional integration of Slovakia into the European economic zone a nd the marked opening of the Slovak economy. One can therefore expect that protection of economic competition will become a high priority fa ctor for the guarantee of harmonic operation of economics. Anti-Monopo ly Office of the Slovak Republic as similar institutions in EU countri es, plans to utilise methodical analysis of the statue of competition background, and while using exact methods applied in developed industr ial countries, aims to quantify the degree of concentration in individ ual branches of the national economy. Based on this analysis the Offic e will prepare for Government bodies qualified information for the fol lowing two decision levels: for a long term point of view, information for generation of an economic policy concept; for a short term point of view, information for actual corrections of this policy. In the lon g-term horizon, the standard task of the Anti-Monopoly Office of the S lovak Republic will be to monitor systematically the status and develo pment of the competition background within the whole of Slovak economi cs and to prepare for decision-makers scientifically based and recomme ndations quantified by exact methods for the preparation of an economi c policy concept dealing with the development of the economy for the p rotection of a competitive environment in the branches of the Slovak n ational economy. A number of methods more or less suitable for the eva luation of the degree and effects of concentration in conditions of im perfect competition can be found in special literature. The essence of most of the methods is quantification of indicators, which describe i n a certain way the position of an individual producer within the fram ework of a production branch in the relevant market for a certain comm odity, and eventually characterize the state of competition background in the monitored branch. Ultimately one can split these methods into two groups: methods that measure the degree of concentration in the br anch in the relevant market for a monitored commodity, and methods tha t measure the degree of economic strength of an individual producer. W ith some simplification one can say that all methodological tools for measuring concentration in fact quantify the share of relevant charact eristics (for instance turnover share) of a certain subject of a parti cular hierarchical structure (for instance an enterprise within the fr amework of an industrial branch) in the total value of these character istics summed up for all analysed subjects. Data Base of the Model By means of the case study, we illustrate possibilities for the exploitat ion of quantitative methods the evaluation of the state of competition background in the branch of furniture manufacture in the Slovak Repub lic, based on the 1995 data. in spite of the fact that available data base provided data for the year 1995 only and therefore did not allow to execute dynamic analyses of the degree of concentration development in the relevant branch throughout a certain time period, the results are by no means uninteresting. During this relatively short period, e. g. during the year 1995, two allowed concentrations were implemented i n the branch of furniture production, thus allowing research into the reaction of individual concentration indicators on this development tr end in the branch. The manner of respecting the import of monitored co mmodities into the relevant Slovak market presented some problems. Thi s import into the Slovak Republic during the year 1995 represented mor e than 20% of the market. It is obvious that such a share is significa nt for the position of individual producers in the relevant Slovak mar ket. We therefore included furniture imports into the analysis as an a ggregated item within a tentative enterprise. Based on the a