A panel data analysis of the effect of state governance on the global competitiveness of BRICS nations

Abstract

This research investigates the effect of state governance of BRICS nations on their global competitiveness and specific aspects of competitiveness factors, i.e., Knowledge, Technology, and Future Readiness, for the period of 2017-2021 using World Bank's World Governance Indicators (WGI) as the independent variable and IMD's World Competitiveness Ranking (WCR) as the dependent variable. The role of state governance emerged as an important source of global competitiveness and its factors for BRICS nations in the results which revealed certain specific crucial relationships. Overall, 37.68% variation in the WCR rankings of BRICS nations is determined by four key dimensions of WGI namely Government Effectiveness, Political Stability and Absence of Violence, Regulatory Quality, and Control of Corruption with the Control of Corruption being the most significant variable in the model. For the hypotheses relating the State Governance and specific factors of Knowledge, Technology, and Future Readiness, the highest contribution of 40.19% is revealed to be contributed by these four governance variables in Technology rankings, followed by 32.93% variation in Future Readiness and 27.03% in Knowledge. The results provide evidence for the role of the quality of governments and governance in securing global competitiveness by nations. The results are particularly useful for strategic state governance planning and implementations for BRICS nations to improve their competitive global rankings individually and collectively, particularly in the dimensions of control of corruption, government effectiveness, political stability, and absence of violence.