Competitiveness and Economic Growth: A Model with Application to 105 Countries (2006 to 2017)

Fábio Gama; Suzana Bastos; André Martins

Authors

Fábio Gama
Suzana Bastos
André Martins

Keywords:

economic growth; world economic forum; global competitiveness index; basic investment; panel data

Abstract

This study aims to establish a link between economic growth and competitiveness based on data from the World Economic Forum (WEF). WEF outlines the competitiveness of countries in 12 pillars, which are grouped into three sub-indices -basic requirements, efficiency enhancers, and innovation and sophistication factors. In particular, this paper presupposes a model in which efficiency enhancers and factors of innovation and sophistication depend on the evolution of basic requirements in earlier periods. The analytical solution suggests that the level of economic activity of countries is a function of the current and lagging growth rate of basic requirements. An empirical application of the model is performed for 105 countries using the Pooled Ordinary Least Squares (POLS) and Fixed Effects (FE) methods. In sum, the results show that the level of economic activity of the countries is positively related to the competitiveness indicators, besides corroborating the conclusion of the model that the current and lagged rate of the basic factors are the main determinants of the activity level of the countries.

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How to Cite

Competitiveness and Economic Growth: A Model with Application to 105 Countries (2006 to 2017). (2020). Global Journal of Human-Social Science, 20(E8), 1-10. https://socialscienceresearch.org/index.php/GJHSS/article/view/3443

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