The networked readiness index: the impact of the degree of government regulation of the economy on the intensity of competition on local market

The article is devoted to the research of the impact of the degree of government regulation of the economy (government intervention in the price formation process, foreign trade and licenzing) on the intensity of competition of local market. The regression analysis between Price-regulation subindex, Foreign trade subindex, as well as Lisenzing subindex of the Index of leftness (rightness) of the economy, and the indicator of Intensity of local competition is held. Changes in GDP per capita in dependence of each Subindex are analyzed. The dynamics of Price-regulation subindex, Foreign trade subindex, as well as Lisenzing subindex in Azerbaijan over years is investigated. It was defined that to increase the intensity of competition on local market, taking into consideration other influencing factors, the price formation process, foreign trade policy and licenzing must be more liberal (despite the fact that each country has its own optimal degree of government intervention in the economy using these regulatory mechanisms, in general, in order to ensure the economic development of the country, the Price-regulation subindex should be less than 0,250, the Foreign trade subindex should be less than 0,260, and the Licensing subindex should be less than 0,105). Azerbaijan has a sufficient potential for further liberalization of price formation, as well as foreign trade and licenzing.