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A new perspective on the competitiveness of nations


  • Önsel, Sule
  • Ülengin, Füsun
  • Ulusoy, Gündüz
  • Aktas, Emel
  • Kabak, Özgür
  • Topcu, Y. Ilker


The capability of firms to survive and to have a competitive advantage in global markets depends on, amongst other things, the efficiency of public institutions, the excellence of educational, health and communications infrastructures, as well as on the political and economic stability of their home country. The measurement of competitiveness and strategy development is thus an important issue for policy-makers. Despite many attempts to provide objectivity in the development of measures of national competitiveness, there are inherently subjective judgments that involve, for example, how data sets are aggregated and importance weights are applied. Generally, either equal weighting is assumed in calculating a final index, or subjective weights are specified. The same problem also occurs in the subjective assignment of countries to different clusters. Developed as such, the value of these type indices may be questioned by users. The aim of this paper is to explore methodological transparency as a viable solution to problems created by existing aggregated indices. For this purpose, a methodology composed of three steps is proposed. To start, a hierarchical clustering analysis is used to assign countries to appropriate clusters. In current methods, country clustering is generally based on GDP. However, we suggest that GDP alone is insufficient for purposes of country clustering. In the proposed methodology, 178 criteria are used for this purpose. Next, relationships between the criteria and classification of the countries are determined using artificial neural networks (ANNs). ANN provides an objective method for determining the attribute/criteria weights, which are, for the most part, subjectively specified in existing methods. Finally, in our third step, the countries of interest are ranked based on weights generated in the previous step. Beyond the ranking of countries, the proposed methodology can also be used to identify those attributes that a given country should focus on in order to improve its position relative to other countries, i.e., to transition from its current cluster to the next higher one.

Suggested Citation

  • Önsel, Sule & Ülengin, Füsun & Ulusoy, Gündüz & Aktas, Emel & Kabak, Özgür & Topcu, Y. Ilker, 2008. "A new perspective on the competitiveness of nations," Socio-Economic Planning Sciences, Elsevier, vol. 42(4), pages 221-246, December.
  • Handle: RePEc:eee:soceps:v:42:y:2008:i:4:p:221-246

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    References listed on IDEAS

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    Cited by:

    1. Joanicjusz Nazarko & Marta Komuda & Elzbieta Szubzda, 2008. "The DEA method in public sector institutions efficiency analysis on the basis of higher education institutions," Operations Research and Decisions, Wroclaw University of Technology, Institute of Organization and Management, vol. 4, pages 89-105.
    2. Alathur, Sreejith & Vigneswara Ilavarasan, P. & Gupta, M.P., 2016. "Determinants of e-participation in the citizens and the government initiatives: Insights from India," Socio-Economic Planning Sciences, Elsevier, vol. 55(C), pages 25-35.
    3. Olivera Kostoska & Ilija Hristoski, 2017. "ICTs and innovation for competitiveness: Evidence for Western Balkans vis-à-vis the European Union," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics, vol. 35(2), pages 487-518.
    4. Bazilian, Morgan & Onyeji, Ijeoma, 2012. "Fossil fuel subsidy removal and inadequate public power supply: Implications for businesses," Energy Policy, Elsevier, vol. 45(C), pages 1-5.
    5. Mashabela, Juliet & Raputsoane, Leroi, 2018. "Important factors in a nations international competitiveness ranking," MPRA Paper 86477, University Library of Munich, Germany.
    6. Konara, Palitha, 2020. "The role of language connectedness in reducing home bias in trade, investment, information, and people flows," Research in International Business and Finance, Elsevier, vol. 52(C).
    7. Salas-Velasco, Manuel, 2018. "Production efficiency measurement and its determinants across OECD countries: The role of business sophistication and innovation," Economic Analysis and Policy, Elsevier, vol. 57(C), pages 60-73.
    8. Irina-Elena Gentimir, 2013. "The Role Of The Private Sector In Developing And Supporting International Competitiveness," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 5(2), pages 205-215.
    9. Natalia Mańkowska, 2016. "Metody pomiaru e-administracji w kontekście konkurencyjności międzynarodowej / Methods of measurement e-government in the context of international competitiveness," International Economics, University of Lodz, Faculty of Economics and Sociology, issue 14, pages 158-168, June.


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