Assessment of local competitiveness: A composite indicator analysis of Costa Rican counties using the ‘Benefit of the Doubt’ model

Abstract

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).

Strategic priorities and competitiveness of businesses operating in different entrepreneurial ecosystems: a benefit of the doubt (BOD) analysis

“…First, early work using BOD models focused on the study of specific policies and the analysis of CIs at country level (see, e.g., the work by colleagues (2007 and). This research strand also includes, among others, the studies by Mizobuchi (2014) who analyzes the OECD's 'better life' index, and the studies by Araya-Solano (2019) and Lafuente, Araya et al (2020) who assess the drivers of county competitiveness using index numbers in a developing setting (Costa Rica).…”

Pulling from the front or pushing from behind: how competency prioritisation should differ to optimise firm competitiveness

“…Because each firm’s attainable capability frontier will impact its competitive advantage potential in different ways, the heterogeneous distribution of resources across firms ultimately forms the building blocks of each venture’s competitiveness. The usage of resources to generate a specific set of capabilities within a firm’s possible capability frontier ultimately results in a configuration of the business’ system of competencies (Lafuente et al , 2020). The potentially positive value that a focal competency may create is a function of both its availability and the configuration of the system of competencies within the firm.…”

“…However, the way firms choose to use their limited resources, and the capability configuration they use to compete, often produces suboptimal competitiveness outcomes (Oliver, 1997). Firm-level competitiveness is the result of the amalgamation of a set of complex and heterogeneous resourLafuenteces and capabilities (Lafuente et al , 2020). The set of resources is specific to each organisation and determines what an entrepreneurial or business venture has at its disposal to compete with, and subsequently the capabilities that it can generate from these.…”

“…Subsequently, these traits are increasingly encouraged by policy (European Commission, 2017; OECD, 2017). However, other drivers of competitiveness, such as human capital based, strategic or even market-oriented competencies, are also “essentials” that firms must master to optimise their competitive potential (Lafuente et al , 2020). The driver that should optimally be prioritised given the distinct resource limitations and contrasting capability frontiers is likely to differ from firm to firm (Lafuente et al , 2021).…”

A note on the configuration of the digital ecosystem in Latin America

“…Composite indicators constitute valuable tools for policy makers interested in identifying benchmarks as well as setting policy priorities (OECD, 2008). Studies based on composite indicators computed via the BOD method have been used in different fields including, among others, economics (e.g., internal market index, global competitiveness index or county competitiveness), human development (e.g., human development index), quality of life (e.g., better life index), or business competitiveness (Despotis, 2005;Cherchye et al, 2008;Mizobuchi, 2014;Alonso-Ubieta and Leiva, 2019;Araya-Solano, 2019;Lafuente, Araya, Leiva, 2020).…”