A Grounded Approach to Identifying National Competitive Advantage: A Preliminary Exploration

Abstract

The geography of national competitiveness is now charted annually by international indices. However, quite what such indices measure is uncertain as the concept of competitiveness as applied to economies has no clear or agreed definition among scholars. Still less is there any consensus regarding the factors that contribute to national competitiveness. Notwithstanding, governments have incorporated this vague and ill-measured concept both into policy parlance and into public expenditure plans, suggesting that an objective and practical method for identifying national competitiveness is urgently needed. The author reports an exploratory, inductive, approach to identifying the components of competitive advantage of a specimen economy (Hong Kong), by using data from 127 firms operating within it. An inventory of forty-one firm-suggested advantages of Hong Kong is scored, then exploratory factor analysis is used to derive a statistically and conceptually robust index of ten scales representing components of Hong Kong's competitive advantage. Results point to a new, grounded, approach to identifying competitiveness, not just of nations, but of regions and cities too.

Proceedings. International Scientific Conference "Local Economic and Infrastructure Development of SEE in the Context of EU Accession", September 20-21, 2013

“…The main task of LGU's is to concentrate on elements of competitiveness that could become strategic plan targets. (Porter 1990;Thompson 2003;Thompson 2004;Smith 1988Smith -2005Nicolas and Firzli 2012). Consultants on this paper focused on two basic elements of competitiveness: labour productivity and cost competitiveness Pavić 2001;Savanović 2009;Swainiewicz 2010;Zlokapa et al 2008).…”

“…The contribution of the paper is local government unit productivity and competitive indicator as barrier for future investments (Swainiewicz 2010;Porter 1990;Thompson 2003;Thompson 2004 Number of municipalities varied from about four hundred eighteen municipalities in 1952, up to one hundred and nine municipalities in 1991, or one hundred fiftyfour municipalities in 1998 . The Constitution of the Federation, within the definition of municipal government, introduced a provision which specifies that the municipality achieves local governments and municipalities statutes (Pejanović and Sadiković 2010;.…”

Relative Impacts of Quantitative and Qualitative Indicators of International Competitiveness

“…It offers an explanation of what makes some countries more successful than others in terms of their relative strategic trade positions, and their relative abilities to outwit each other in the global market place. Thompson (2003) applied an explanatory factor analysis to derive a statistically robust index of ten scales representing components of Hong Kong's competitive advantage, but lamented about the uncertainty of exactly what such indices should be measuring, because, as he states, "the concept of competitiveness as applied to economies has no clear or agreed definition among scholars", and moreover there is no "consensus regarding the factors that contribute to national competitiveness." Yet, due to the overwhelming importance of this apparently "vague and ill-measured" concept that governments and public policy makers have incorporated into public expenditure policy objectives, it is very important that an objective and practical method for identifying national competitiveness be found.…”

“…The ability to maintain fitness in this setting is the "competitive advantage" of the firm, and by extension, of the home country from which the firm operates. A country's international competitiveness is created from the efficient allocation, rather than inherited through the abundant acquisition, of resources (Stone and Ranchhod, 2006;Thompson, 2003). This is even more so because the existence of abundant resources (such as the abundant supply of cheap labor or raw materials) is often met with a lax reliance on the advantages of such abundance, resulting in their inefficient deployment.…”

The causal impact of material productivity on macroeconomic competitiveness in the European Union

“…DMC measures the total amount of materials directly used within an economy. It comprises biomass, metals, minerals, and fossil fuels and is defined as the quantity Thompson (2003) criticises competitiveness indices (and thus the GCI) on four grounds: (1) content validity (methodologies and underlying indicators changes over time), (2) convergent validity (correlation across different indicators is high suggesting that they all measure similar aspects, but not necessarily competitiveness), (3) weighting and nature of variables (weights of indicators are arbitrary), and (4) methodology (the data are not transparently described). Lee (2010) argues that the problem is the lack of theoretical and empirical foundation for using individual sub-indicators.…”