An analysis of growth competitiveness

Jay Squalli, Kenneth Wilson and Sarah Hugo

International Review of Applied Economics, 2008, vol. 22, issue 1, 105-126

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.

Keywords: World Economic Forum; Growth Competitiveness Index; structural equation modeling; international growth competitiveness (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (5)

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DOI: 10.1080/02692170701745978

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