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Is there a Vicious circle in Muslim World? Trade competitiveness and investment strategies

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Abstract

The study tests the existence of a vicious circle of the lack of investable funds, weaker technological advancement and business competitiveness in Muslim countries. Its second objective is to quantify the magnitude of variations in competitiveness between the Muslim world and the rest of world. A model was established to quantify the linkages between the financial resources, technological advancement, business sophistication and competitiveness. The results are based on 111 countries, 30 out of which belong to Muslim world. The governance of the political and corporate institutions, higher education and technology readiness are classified as significant factors of the business competitiveness. It was concluded that governance, technological readiness and higher education are the important and major factors of business competitiveness, while investment was not identified as major determinant of the competitiveness. The study rejects the hypothesis of existence of the vicious cycle in Muslim world. It concludes that Muslim world can achieve the higher target of business competitiveness and ultimately the sustainable economic development by improvement in the higher education and institutional governance.

Suggested Citation

  • Mehar, Ayub, 2008. "Is there a Vicious circle in Muslim World? Trade competitiveness and investment strategies," MPRA Paper 11284, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:11284
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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