Export Performance as a Measurement of Competitiveness

Abstract

The competitiveness of a particular national economy and its business environment is critical for the country’s economic, political and societal development. Competitiveness can be analyzed using a diapason of single- and multi-factor competitiveness indicators that contribute to quantification as well as and the analysis of internal and external competitiveness determinants. Suitable levels of competitiveness measurements and analyses, be they in terms of a company or a nation, are a matter of continuous debates. The authors of this paper have used econometric equations (models) in order to quantify and qualify the impact of the institutional environment, a factor represented both by the quality of governmental and regulatory measures as well as the corruption perception index. Institutional environment impact was measured in terms of export performance, as this metric represents one of the most important single-factor indicators of competitiveness. For the purposes of our research, the precise quantification of exogenous variables was not a necessity; rather we evaluated the assessment of strength and direction of relations between endogenous and exogenous variables. Our assumption was grounded in the notion that a higher quality of institutional environment is characterized by a higher level of competitiveness and lower transaction costs based on the belief that export performance is a reliable measure of competitiveness. Our research demonstrated, however, that the export performance is not a universal indicator of competitiveness, a finding that signals the need to apply other indicators, most notably, multi-factor ones.

Keywords

• competitiveness
• export performance
• household consumption
• government effectiveness
• regression analysis