IS THE GLOBAL COMPETITIVENESS INDEX INFORMATIVE?
Abstract
This paper critically discusses whether, and to what extent, the Global Competitiveness Index (GCI) compiled by the World Economic Forum is informative, given the cross-positive effect across indicators that involve ranking of countries. The results suggest positive cross-effects between sub-indices for a group of economies in the European Union (EU) and other certain advanced economies. Economies with an advanced level of higher education and training, and a superior level of innovation, tend to experience a higher level of ranking in the global competitiveness index compared to countries with lower levels of education and innovation. The results of this study for a group of 28 EU member states during 2007-2015 reveal a heterogonous position of the EU member states despite their obvious achievement of converging income-per-capita in the same period. However, the results also indicate potential methodological inconsistencies in terms of the ranking of countries, relating to a common problem in economics, known as endogeneity or reverse causality, and based on variables that, statistically, appeared significantly correlated to each other.References
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