Are Human Development and Innovativeness Levels Good Predictors of the Competitiveness of Nations? A Panel Data Approach

Basak Cetinguc (), Fethi Calisir, Murat Guven and Bulent Guloglu
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Basak Cetinguc: Industrial Engineering Department, Management Faculty, Istanbul Technical University, İstanbul 34485, Turkey
Fethi Calisir: Industrial Engineering Department, Management Faculty, Istanbul Technical University, İstanbul 34485, Turkey
Murat Guven: Department of Statistics, Faculty of Science, Sakarya University, Sakarya 54050, Turkey
Bulent Guloglu: Department of Economics, Management Faculty, Istanbul Technical University, İstanbul 34485, Turkey

Sustainability, 2023, vol. 15, issue 24, 1-16

Abstract: Nations must adapt to the changing and developing world to sustain and develop their competitiveness. Human development and innovation are the two key concepts to increase the competitiveness of a nation. This study aims to examine the relationship between the Human Development Index (HDI), Global Innovation Index (GII), and Global Competitiveness Index (GCI) across different income groups from 2010 to 2019. The main objective is to identify potential variations in these relationships based on the income level of the countries involved. Panel data analyses using Common Correlated Effects Mean Group (CCEMG) and Augmented Mean Group (AMG) estimators are conducted to examine the relationships. Additionally, Pairwise Dumitrescu Hurlin Panel Causality Tests are conducted to examine the causal relationships between variables. The results show that HDI has a significant positive effect on GCI in each income group. Improving human development such as raising living standards and providing equal education opportunities for every member of society can contribute to a country’s competitiveness. Moreover, it is found that the effect of GII on GCI varies by income group. Specifically, the results indicate that the effect of GII on GCI is not supported for upper-middle-income countries. Therefore, while developing strategies to increase competitiveness through innovation, it is important to consider the income group of a nation. The findings of this study may assist policymakers, researchers, academics, and politicians to enhance their perspectives and formulate strategic and effective recommendations for action.

Keywords: competitiveness; GCI; GII; HDI; panel data approach and relationships (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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