Institutional Considerations for the EU Gas Sector Competitiveness

Abstract

The study explores the subject of sectoral competitiveness on the example of gas sectors in different European countries. Literature review on sectoral competitiveness suggests that the concept has evolved considerably over time and that contemporary definitions of competitiveness span beyond traditional economic factors. Studies on gas sector in this context to date, however, have largely focused on export competitiveness of upstream activities. To address the research gap, a targeted approach is suggested to study and compare competitiveness of the entire national gas sectors, spanning beyond standard productivity measures. A dedicated synthetic indicator is designed to perform a comparative analysis of contemporary gas sectors, taking account of the gas price offered to the industry, institutional performance, infrastructure readiness and job creation potential. Then, the case study is presented and it examines four countries that have liberalized their gas sectors and are reliant on gas imports to a different degree. Results confirm that the application of a synthetic indicator factoring in different aspects of sectoral competitiveness is appropriate to arrive at a holistic view of gas sector’s relative performance. The significance of the institutional setup is also confirmed from the perspective of inducing investment, enhancing market liquidity, as well as creating sustainable jobs in the gas sector.