Emerging Economies’ Institutional Quality and International Competitiveness: A PLS-SEM Approach

Abstract

The home country’s institutional framework determines the capacity to compete in the global arena. This paper discusses the linkage between institutional quality (IQ) and international competitiveness (IC). We measured institutions’ quality in emerging economies through the use of selected indicators between 2007–2017. To evaluate the proposed IQ constructs and their relationship with IC, we applied partial least squares – structural equation modeling (PLS-SEM) analysis. The model outcomes suggest that political and lack of systemic conditions have a significant and negative effect on international competitiveness, while science, technology, engineering and mathematics (STEM) resource conditions have a significant and positive effect.

Keywords

• institutional quality
• international competitiveness
• emerging economies
• PLS-SEM