IS THE GLOBAL COMPETITIVENESS INDEX INFORMATIVE?
AbstractThis 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.
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