GLOBAL COMPETITIVENESS AND ECONOMIC GROWTH: A ONE-WAY OR TWO-WAY RELATIONSHIP?
Aleksandra Kordalska () and
Magdalena Olczyk ()
Equilibrium. Quarterly Journal of Economics and Economic Policy, 2016, vol. 11, issue 1, 121-142
The Global Competitiveness Index is treated as a standard to measure the competitiveness of countries. Leaders look at it to make policy and resource allocation decisions, because global competitiveness is expected to be related to economic growth. However, studies which analyze the empirical relationship between these two economic categories are very rare. It is still an open question in the literature whether economic growth can be used to predict future global competitiveness or the other way round. This paper empirically tests the relationship between the GCI and the economic growth rate by using a panel Granger causality analysis based on annual data for 114 countries divided into five groups by income criteria and covering the period 2006-2014. We confirm a strong unidirectional causality among the countries analyzed, i.e. GDP growth causes global competitiveness. Additionally, we find that the GCI is successful in predicting economic growth for the majority low income and OCED high income counties, but among the middle income countries this relationship exists only for large economies such as China and India.
Keywords: Global Competitiveness Index; economic growth; panel Granger causality test (search for similar items in EconPapers)
JEL-codes: O40 O57 C23 F43 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
Working Paper: Global Competitiveness and Economic Growth: A One-Way or Two-Way Relationship? (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:pes:ierequ:v:11:y:2016:i:1:p:121-142
Access Statistics for this article
Equilibrium. Quarterly Journal of Economics and Economic Policy is currently edited by Adam P. Balcerzak
More articles in Equilibrium. Quarterly Journal of Economics and Economic Policy from Institute of Economic Research Contact information at EDIRC.
Series data maintained by Adam P. Balcerzak ().