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An analysis of growth competitiveness

Author

Listed:
  • Jay Squalli
  • Kenneth Wilson
  • Sarah Hugo

Abstract

The publication of the Global Competitiveness Report 2005-2006 by the World Economic Forum (WEF) (2005) has focused attention once more upon the relative abilities of many countries to compete in world markets. This article provides an analysis and evaluation of the approach taken by the WEF in constructing its measure of international growth competitiveness, the Growth Competitiveness Index (GCI) which is used to rank countries. In particular, the study identifies three areas where the GCI is vulnerable to criticism. First, the treatment of outliers for hard data items is ambiguous and we identify alternative methods for dealing with outliers that are justifiable or even superior. Second, the crucial role of the variable utility patents in the calculation of the GCI is questioned and serious doubts concerning the use of this variable are raised. Third, the article suggests an alternative approach, based upon structural equation modeling, which should be used for the determination of weights in the index calculation process, rather than the arbitrary method adopted by the WEF.

Suggested Citation

  • Jay Squalli & Kenneth Wilson & Sarah Hugo, 2008. "An analysis of growth competitiveness," International Review of Applied Economics, Taylor & Francis Journals, vol. 22(1), pages 105-126.
  • Handle: RePEc:taf:irapec:v:22:y:2008:i:1:p:105-126
    DOI: 10.1080/02692170701745978
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    References listed on IDEAS

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    1. Michela Nardo & Michaela Saisana & Andrea Saltelli & Stefano Tarantola & Anders Hoffman & Enrico Giovannini, 2005. "Handbook on Constructing Composite Indicators: Methodology and User Guide," OECD Statistics Working Papers 2005/3, OECD Publishing.
    2. Hélène Dernis & Mosahid Khan, 2004. "Triadic Patent Families Methodology," OECD Science, Technology and Industry Working Papers 2004/2, OECD Publishing.
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    Cited by:

    1. Harald Bergsteiner & Gayle Avery, 2012. "When Ethics are Compromised by Ideology: The Global Competitiveness Report," Journal of Business Ethics, Springer, vol. 109(4), pages 391-410, September.
    2. Castro-Gonzáles, Segundo & Peña-Vinces, Jesús C. & Guillen, Jorge, 2016. "The competitiveness of Latin-American economies: Consolidation of the double diamond theory," Economic Systems, Elsevier, vol. 40(3), pages 373-386.
    3. Nuno Crespo & Nádia Simões & José Duarte, 2013. "Competition in tourism arrivals – A multidimensional index of geographical structural similarity," Working Papers Series 2 13-05, ISCTE-IUL, Business Research Unit (BRU-IUL).
    4. Jules Leichter & Cristina Mocci & Stefania Pozzuoli, "undated". "Measuring External Competitiveness:An Overview," Working Papers 2, Department of the Treasury, Ministry of the Economy and of Finance.

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