Countries’ governance and competitiveness: business environment mediating effect

Abstract

Purpose The purpose of this study is to analyze how institutional governance and business environment affect countries’ competitiveness and their relative importance. Design/methodology/approach In this paper, the authors analyze how institutional governance and business environment affect countries’ competitiveness, their relative importance and what are the implications for Brazil. The authors have collected data from 131 countries related to the institutional governance, business environment and competitiveness of these countries. For the analysis of the mentioned influences, the technique of partial least squares structural equations modeling is used. Findings Results indicate that the main role in countries’ competitiveness is played by the quality of institutional governance. The quality of the business environment reinforces the positive effect of the quality of institutional governance on countries’ competitiveness (mediation effect). Brazil has poor governance quality indicators when compared to high-middle income countries, especially regarding government effectiveness, political stability and control of corruption. Research limitations/implications The study provides a better understanding of the relative importance of governance quality and business environment quality for countries’ competitiveness. One limitation of this study is that the research was restricted to data related to the year 2019. Practical implications For strategists and decision-makers, understanding these effects on countries’ competitiveness and their relative importance is fundamental to understanding what makes their companies internationally competitive. Social implications The presence and appreciation of institutional governance quality need to be cultivated in society. Originality/value Instead of using the original diamond model, which presents circular relationships, the authors have used the business environment construct, composed of elements of the diamond model to test the relationships between the quality of institutional governance, competitiveness and the business environment.

The role of institutions in shaping state competitiveness: the evidence from the European countries

“…The scientists are unified in the belief that the quality of the institutions is a foundation for competitiveness (see : Bontempo, 2022;Ervits, Zmuda, 2018;Guerrieri, Meliciani, 2004;Hollingsworth, 2000;Ingram, Silverman, 2000;Jaffe et al, 1993;Moon et al, 1998;Peng et al, 2008;Porter, 1990;Porter, Linde, 1995;Rodriguez et al, 2005;Soete, 1987;Tobey, 1990;Wan, Hoskisson, 2003). stated that "property rights institutions have a first-order effect on long-run economic growth, investment, and financial development".…”

Impact of Digital Government on Digital Transformation of Enterprises from the Perspective of Urban Economic Sustainable Development

“…A favorable business environment can effectively promote the digital transformation of enterprises. Optimizing the business environment means liberating productivity and enhancing competitiveness [48]. Firstly, from the perspective of enterprises, the digital transformation of enterprises is a long-term systematic reform project in production, sales, management, and other aspects, characterized by high costs, high risks, and long cycles [49].…”

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

“…They also found that corruption had a very substantial delayed influence on reported SWB but no immediate impact. Bontempo (2022) [4] examined the relative weights of institutional governance and the business environment as they relate to competitiveness and what those factors mean for Brazil. Data on institutional governance, the business environment, and the competitiveness of 131 nations have been gathered by the authors.…”

“…For example, China is a contemporary single-party-led economy that does not hold any direct elections at the national level whereas India is a parliamentary democratic secular republic in which the president of India is the head of state & first citizen of India and the prime minister of India is the head of government (Geddes, Wright, and Frantz, 2018; Öniş & Gençer, 2018) [11,18] . Hence, they differ in ease of doing business, competitiveness, and international standing (Bontempo, 2022) [4] .…”