The efficiency of an international economic competition (for the theory and practice)

Lordkipanidze, Revaz (2017) The efficiency of an international economic competition (for the theory and practice). National Parliamentary Library of Georgia, Digital Fund “Iverieli”. pp. 1-65. ISSN ISBN 978-9941-0-9589-4 (PDF)

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Doctor of Economic Sciences (Specialization: World Economy and International Economic Relations), Founder of Academy of Business named after academician Avtandil Gunia, Academician of Georgian Academy of Economic Sciences Revaz Lordkipanidze ( offers own interpretation for the most significant base of the World Peaceful Policy – the rational defense of an effective international economic competition. R. Lordkipanidze thinks, that readers of his works remember my measuring of the force of competition with the similarity the measuring of a force of an electric current. After following studies, he cames to the conclusion that for recommendations we can suggest the ideal proportions of effective competition on the famous golden ratio 62:38. By this ratio, as it's known, the stars and even the human body are constructed. Naturally, the ideal proportions are not always possible in practice, as well as the human body maybe is athletic or very fat or very thin. In view of the above-mentioned proportion of the golden ratio, R. Lordkipanidze offers the first index of a max perfect competition, which, in my view based upon calculations, must be more, than 100:38. It's about 3 (more, than 2.6). The second index of competition, also preferably, should be more, than 3. The ideal number of companies, by the experience of market analysis, are about 12 - the number of perfection - as the total number of months in the year (not taken into account the small companies, which, for example, employed less, than 100 co-workers and which cannot significantly influence on the macro market). Totally, the ideal integral coefficient of effective competition, according to our calculations of the most cost-effective (profitable) practice, for orientation must be 3x3x12 = 108. That's, when the integral coefficient is less, than about 100, competition authorities should take thought. As a rule, for also strictly justified orientation, the integral coefficient should also have the top line approximately at the level of 10,000 (according to our observations of international practice, for example 20x20x25 have the highest efficiency, with a following sharp reduction of a productivity). But if the antimonopoly authorities will "try" too against honest large enterprises and divide them, we'll get the artificial market, where the integral coefficient is greater than 10,000 and "short circuit "(which in electricity cause the excessive heating and damage to an equipment) will produce "effect" of very large economic losses. If we have, for example, an excessive number of drugstores in very many (almost every) neighborhoods, we won't have "an effect of a competition" and only can get a large number of expired drugs. With presented from author the development of the methodology of the European Commission for the effectiveness of structural changes of the economy, we can separate the influence of the structural factor in the overall increase in efficiency. So we can determine how efficiently we allocated budget funds to the priorities of economic policy and how effective were a free competition and a mobility of resources from one branch to another. The Golden Section is also the best orientation for the proportion between the State and the Private sectors of Economy per the property. This proportion, according with my theory of "real equilibrium", should be on a non-monopoly 50:50 balance up to a maximum about two-thirds of an Economy Private Sector to the Free Market total property. This orientation is normal also for the level of tax revenues of the State Budget from about third of GDP. The level of 38% is justified by us exemplary level for a maximization of an average profit of companies and, therefore, full realization of reserves to a minimization of their costs. Statistics clearly shows, that between quality of the life and the level of force of competition exists almost a direct link. The higher is the level of development of the country, the more are their markets' indexes of a competition. Coming out from new method and its formulas, strength of competition can be represented by the schedule. The USA antimonopoly experience really has the best results and Herfindahl–Hirschman Index very deeply characterizes the level of competition, but one method cannot be ideally enough for an estimate of this difficult notion - we need a set of multi-factorial evaluations, including ours, Linda and many other deep surveys.

Item Type: Article
Uncontrolled Keywords: Competition Theory; International Economy; Efficiency
Subjects: General Works
Divisions: Ivane Javakhishvili Tbilisi State University > Faculty of Medicine
Depositing User: მაია ერისთავი
Date Deposited: 29 Mar 2018 09:03
Last Modified: 29 Mar 2018 09:03

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