Original scientific paper
https://doi.org/10.18045/zbefri.2016.1.91
Is the Global Competitiveness Report the right measure of macroeconomic competitiveness
Marko Djogo
; Faculty of Economics, University of East Sarajevo, Sarajevo, Bosnia and Herzegovina
Nenad Stanisic
orcid.org/0000-0002-7070-4826
; Faculty of Economics, University of Kragujevac, Kragujevac, Serbia
Abstract
The purpose of this paper is to research the effect of abandoning the assumption of
long-term time horizon in terms of reliability of the Global Competitiveness Report
(GCR) findings. In order to achieve this goal we will compare the GCR findings
with the findings of a composite index of competitiveness, named 6 BIC (Basic
Indicators of Competitiveness). We have developed this index on the theoretical
basis provided by Krugman, Fagerbergs, Scott, Lodge, Aiginger and others.
Economists are aware that any theoretical conception, including the GCR, relies
on a number of assumptions and postulations. If some of those have been under
scrutiny, then the whole construction and its findings would lose their credibility.
One of the most significant assumptions rooted in the Global Competitiveness
Report is its longevity. In the long-term, the change in productivity level through
price competitiveness certainly brings out a change in outcome competitiveness
level. However, the effects in short-to-middle term are not certain. Our findings
show that there is a whole range of countries whose national competitiveness is
either under-estimated by the GCR (for example Russia, Turkey, Estonia, Moldova)
or overvalued (Finland, Ireland, Iceland, Portugal, Spain) in short-to-middle term.
The basic conclusion from the obtained results of the research is that the GCR
does not provide sufficiently good view of the current competitiveness of the
countries, and that this indicator needs to be extended also with other
competitiveness indicators, such as those selected in our paper.
Keywords
Macro-competitiveness; productivity level; basic indicators of competitiveness
Hrčak ID:
160752
URI
Publication date:
27.6.2016.
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