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Assessing global competitiveness under multi-criteria perspective

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  • Pérez-Moreno, Salvador
  • Rodríguez, Beatriz
  • Luque, Mariano

Abstract

Nowadays competitiveness has become a key economic feature both in policy and in academia. The Global Competitiveness Index (GCI) of the World Economic Forum is one of the best known competitiveness indices, which measures the microeconomic and macroeconomic foundations of national competitiveness. It conceives competitiveness as the set of institutions, policies and factors that determines the level of productivity of a country. This index allows total substitutability between the twelve pillars that aim to measure the different dimensions of competitiveness, albeit partially modulated by some different weights. In this paper, we implement a multi-criteria approach with new alternative normalization and aggregation formulas for such pillars of competitiveness. In particular, we propose two innovations for the computation of the GCI: (i) a double reference point scheme in the normalization; and (ii) an aggregation function which deals with the problem of substitutability between pillars. We calculate three alternative global competitiveness indices (weak, strong and mixed) with different degrees of substitutability, as well as the mixed index without normalizing. We suggest the use of a suitable mixed index alongside the GCI.

Suggested Citation

  • Pérez-Moreno, Salvador & Rodríguez, Beatriz & Luque, Mariano, 2016. "Assessing global competitiveness under multi-criteria perspective," Economic Modelling, Elsevier, vol. 53(C), pages 398-408.
  • Handle: RePEc:eee:ecmode:v:53:y:2016:i:c:p:398-408
    DOI: 10.1016/j.econmod.2015.10.030
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    References listed on IDEAS

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    1. Raj Nallari & Breda Griffith, 2013. "Clusters of Competitiveness," World Bank Publications, The World Bank, number 15788, December.
    2. Fagerberg, Jan & Srholec, Martin & Knell, Mark, 2007. "The Competitiveness of Nations: Why Some Countries Prosper While Others Fall Behind," World Development, Elsevier, vol. 35(10), pages 1595-1620, October.
    3. Luque, Mariano & Ruiz, Francisco & Steuer, Ralph E., 2010. "Modified interactive Chebyshev algorithm (MICA) for convex multiobjective programming," European Journal of Operational Research, Elsevier, vol. 204(3), pages 557-564, August.
    4. Boltho, Andrea, 1996. "The Assessment: International Competitiveness," Oxford Review of Economic Policy, Oxford University Press, vol. 12(3), pages 1-16, Autumn.
    5. Mercedes Delgado & Christian Ketels & Michael E. Porter & Scott Stern, 2012. "The Determinants of National Competitiveness," NBER Working Papers 18249, National Bureau of Economic Research, Inc.
    6. Luque, Mariano & Miettinen, Kaisa & Eskelinen, Petri & Ruiz, Francisco, 2009. "Incorporating preference information in interactive reference point methods for multiobjective optimization," Omega, Elsevier, vol. 37(2), pages 450-462, April.
    7. Krugman, Paul R, 1996. "Making Sense of the Competitiveness Debate," Oxford Review of Economic Policy, Oxford University Press, vol. 12(3), pages 17-25, Autumn.
    8. Ehrgott, Matthias & Tenfelde-Podehl, Dagmar, 2003. "Computation of ideal and Nadir values and implications for their use in MCDM methods," European Journal of Operational Research, Elsevier, vol. 151(1), pages 119-139, November.
    9. Eckhard Siggel, 2006. "International Competitiveness and Comparative Advantage: A Survey and a Proposal for Measurement," Journal of Industry, Competition and Trade, Springer, vol. 6(2), pages 137-159, June.
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    1. repec:eee:tefoso:v:131:y:2018:i:c:p:4-17 is not listed on IDEAS

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