The paper investigates both the impact of domestic and import competition on performance of manufacturing industries in the Czech Republic in 1998 – 2002. Using panel data we found a strong increasing non-linear (diminishing) relationship between performance of manufacturing industries and domestic competition measured by the Herfindahl-Hirschman Index. Import competition measured by an import penetration ratio is negatively related to performance of Czech industries, while foreign direct investments are positively correlated with performance.
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