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Country Competitiveness: an Empirical Study

Country Competitiveness: an Empirical Study

Title: Country Competitiveness: an Empirical Study
Author: Kristjansdottir, Helga
Date: 2017-07-30
Language: English
Scope: 31-44
University/Institute: Háskóli Íslands
University of Iceland
School: Félagsvísindasvið (HÍ)
School of Health Sciences (UI)
Department: Viðskiptafræðideild (HÍ)
Faculty of Business Administration (UI)
Series: Baltic Region;9(2)
ISSN: 2079-8555
2310-0524 (eISSN)
DOI: 10.5922/2079-8555-2017-2-3
Subject: Competitiveness; Foreign direct investment; Multinomial logistic procedure; Heckman two-step procedure; Samkeppni; Erlendar fjárfestingar; Þjóðhagfræði
URI: https://hdl.handle.net/20.500.11815/418

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Helga Kristjánsdóttir. (2017). Country Competitiveness: an Empirical Study, 9(2), 31-44. doi:10.5922/2079-8555-2017-2-3


What makes countries competitive? What economic policies effectively influence country competitiveness? The aim of this research paper is to analyse country competitiveness empirically, in order to explore the factors that make countries competitive. This can allow governments to structure their business environment differently, and to elaborate strategies aimed at improving their countries’ overall competitiveness. Economic size and trading conditions have proven important for economic success throughout history. Individual competitiveness and business competitiveness are commonly talked about. The author analyses the overall economic competitiveness of countries. The author argues that trade is subject to various factors, including entrepreneurship and economic openness. Competitiveness is analysed in this current research, using IMD World Competitiveness Yearbook data for 55 countries in the estimation sample. This unique research applies a Multinomial Logistic procedure, and a Heckman Two-Step procedure in its accountancy for market size, exports, openness, and foreign direct investment. The business environment factors for estimation are highlighted. Also, several macro-economic modifications of the basic model specification are tested, providing further empirical analysis. Results indicate that the ten most competitive countries tend to be driven by foreign direct investment, exports and entrepreneurship.

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