Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/219679 
Year of Publication: 
2015
Series/Report no.: 
Institute of Economic Research Working Papers No. 63/2015
Publisher: 
Institute of Economic Research (IER), Toruń
Abstract: 
The Global Competitiveness Index is treated as a standard to measure the competitiveness of countries. Leaders look at it to make policy and resource allocation decisions because global competitiveness is expected to be related to economic growth. However, studies which analyze the empirical relationship between these two economic categories are very rare. It is still an open question in the literature whether economic growth can be used to predict future global competitiveness or the other way round. This paper empirically tests the relationship between the GCI and the economic growth rate by using a panel Granger causality analysis based on annual data for 114 countries divided into five groups by income criteria and covering the period 2006-2014. We confirm a strong unidirectional causality among the countries analyzed, i.e. GDP growth causes global competitiveness. Additionally, we find that the GCI is not successful in predicting economic growth for the majority of the 114 counties, with the exception of few large economies such as China, India, the United States and Russia.
Subjects: 
Global Competitiveness Index
economic growth
panel Granger causality test
JEL: 
O40
O57
C23
F43
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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