Global Competitiveness and Potential for Higher Exports

Abstract

The objective of this research is to examine the possibility of higher export level for the countries which have a higher level of competitiveness. The study has taken the Global Competitiveness Index (GCI) as a proxy for the level of Competitiveness and the countries are divided into high and low export countries on the basis of export volume. Furthermore, the study also analyzes the relative efficacy of different components’ of competitiveness index. The estimated results based on the binary probability distribution model showed a positive relationship between higher export level probability and level of Competitiveness. This result is consistent with the hypothesis that the economies having higher levels of competitiveness would have greater possibilities of generating higher exports. GCI is considered as most acceptable index for measuring competitiveness level of a country in the globalized economic system. However, realization of importance through empirical investigation is almost negligible, particularly for the developing countries. The results suggest that developing countries should concentrate on enhancing competitiveness level to achieve the goal of higher exports. The result further suggested that the sub-index “basic requirement” is more important for the enhancement of exports and countries should concentrate on improving the pillars of basic requirements for enhancing competitiveness.