An Overview of the Dynamic Competitiveness of Countries

The term “international competitiveness” has been associated over time with different definitions andsenses, being at the moment one of the most controversial topics in the field of international economics. The lack of competitiveness of many European countries vis-à-vis the competitive ones is no longer due to the fact that their wages are substantially lower or that labor productivity has not increased. The problem is that they are stuck at middle levels of technology. We followthe assumption that the technological gap between a frontier and a latecomer country represents an important path of development for the latter. The approach in this paper is to assess countries’ economic development throughout the relationship between GDP growth on one hand, and the GDP gap, technological competitiveness, capacity competitiveness, price competitiveness and investment competitiveness on the other hand. We introduced 33 countries (EU27, China, Japan, Canada, Norway, Switzerland and USA) observed during 12 years, from 2000 until 2011. To increase the efficiency of our econometric work, we chose to use panel data by taking advantage of all the information about the inter-temporal dynamics and individuals. The regression was estimated using a Random Effects Model and a Random-Effects Linear Model with AR (1) disturbance (GLS estimation). In both cases, the outcomes proved to be significant, with the expected signs and statistically significant coefficients.