This study employs a Benefit-of-the-Doubt (BOD) weighting model that incorporates information generated via a participatory method-i.e., based on experts' opinion-to construct a composite indicator that evaluates the competitiveness level of Costa Rican counties during 2010-2016. The results of the empirical application based on the county competitiveness index (CCI) reveal the superior informative power of the proposed BOD composite indicator, relative to models using equal weight restrictions or weights estimated via principal component analysis. The county competitiveness index is a valuable tool to monitor counties' competitive level, and the findings underline that an analysis based on the BOD approach may offer useful information to policy makers on what strategic actions may potentially optimize the allocation of local resources and, subsequently, enhance economic outcomes (i.e., business creation and employment).

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This study evaluates how regional competitiveness and relevant properties of the manufacturing industry—i.e., size and rate of manufacturing firms—impact changes in the rate of business service firms. By employing fixed-effects regression models on a sample of 81 Costa Rican counties during 2010-2016, the findings reveal that the quality of the local environment positively affects business service specialization. Besides, manufacturing businesses contribute to increase in rate of business services; however, this effect is only significant in counties with a greater manufacturing base, that is, in counties with a critical mass of manufacturers, in terms of number of manufacturers.