Business Sophistication Research Articles

Innovation Input-Output Analysis of African Countries

Given the importance of innovation in global competitiveness, this study aims to analyze the relationship between innovation input-output in African countries from 2009 to 2017, determining the degree of significance of each input on the output. With data collected from the Global Innovation Index, an Econometric random Fixed effect model was run revealing a negative insignificant effect of institutions on innovation, a positive insignificant effect of human capital on innovation, a positive insignificant effect of infrastructures on innovation, a positive significant effect of market sophistication on innovation, and finally a positive significant effect of business sophistication on innovation. Keywords : Innovation, input-output, African countries. DOI : 10.7176/JAAS/54-09 Publication date : April 30 th 2019

Erratum

Bach MP, Zoroja J and Loupis M. RFID usage in European enterprises and its relation to competitiveness: Cluster analysis approach. International Journal of Engineering Business Management 2016; 8: 1–11. DOI: 10.1177/1847979016685093 While processing this paper, a comment on the proof was inadvertently left in the Abstract section. The updated and corrected version of the Abstract reads as follows: Abstract The radio frequency identification (RFID) is one of the most promising new technologies of modern economy, with a high potential of improving the efficiency and productivity of enterprises. The main goal of this study is to determine the extent of RFID usage in European (EU) countries and to estimate whether there is a relation between countries’ competitiveness and their levels of RFID usage. First, the trend of RFID usage among EU enterprises is analyzed for the years 2009, 2011, and 2014. Second, a cluster analysis is applied with the goal to create homogenous groups of countries according to the RFID application across different industries. Third, countries from different clusters were compared according to their competitiveness in 2014. Results revealed that enterprises in Europe differ substantially according to their RFID usage. Also, RFID usage is not evenly distributed among countries across different industries, since some countries were leaders in RFID usage in one industry while lagging behind in RFID usage in other industries. Finally, countries from clusters with a higher RFID usage level also have a higher level of technological readiness and innovation, while smaller differences were found in business sophistication. The article has been corrected.

Understanding the foundations of global competitive advantage of nations

PurposeThis paper focuses on the issue of global competitive advantage of nations, based on the dimensions analyzed by the World Economic Forum in assessing the economic competitiveness of a large sample of countries. From the different stages of development of the countries, this study aims to help us to recognize what variables better explain the global competitive advantage of economies.Design/methodology/approachFollowing quantitative analysis, results based on PLS show what dimensions within each economic development stage best explain the global competitive advantage of economies.FindingsBeyond the institutions, infrastructure and regulation of the markets, higher education and training, the technological readiness, the business sophistication and innovation contribute greatly to explain the competitive advantage of economies.Originality/valueUnderstanding the drivers of global competitive advantage of nations, this study may help academics to conduct new studies, as well as politicians to define intervention priorities.

How can policy makers foster innovation? Observations from an analysis of OECD countries

In this paper, we discuss the main determinants of innovation in OECD countries using annual data covering the period 2006–2015. Panel techniques, including Kao co-integration, fully modified ordinary least squares (FMOLS) and panel Granger causality tests, are implemented to investigate the causal and long-term linkages. Our empirical findings reveal that the macroeconomic environment, business sophistication, quality of the education system, technological readiness and infrastructure have significant and positive impacts on innovation in the long term.

The role of innovation in venture capital: empirical evidence from European Union and EFTA countries

ABSTRACTThis article investigates the effects of innovation attempts on the venture capital and investment activity in the cases of the selected European Union plus European Free Trade Agreement countries using annual panel data and by controlling for real income growth and business sophistication. Our findings suggest that innovation has positively significant effects on venture capital in the cases without opt-out countries (United Kingdom and Denmark); however, these effects become negative in the cases with opt-out countries. Policy implications are provided in the conclusion section of this study.

Competitiveness and sustainable growth analysis of the EU countries with the use of Global Indexes' methodology

The issue of countries' competitiveness and sustainable economic growth is constantly at the centre of interest and represents the frequent object of research in economic theory as well as economic practice. The multi-criterial approach and the assessment methodologies relating to the global competitiveness have been dynamically adjusted over the recent years to reflect the current globalization trends in the world economy. The main objective of this study is to analyse the objectivity and resulting values' deviations of the Global competitiveness Index (GCI) and World Competitiveness Index (WCI) composite indexes that are currently considered to be the world's most respected and to identify the impact of key factors that affect the countries' competitive positions with a focus on Slovakia. The research study is realized within the group of EU (24) countries for the period 2006 – 2016. The partial objective is to summarize the main starting points of the World Economic Forum (WEF) and Institute for Management Development (IMD) composing these indices, to identify their common features and different approaches that create differences in the results achieved. Then we analyzed the differences between the resulting rankings and the resulting scores of the GCI and WCI rated countries. In the next part, we focused on analyzing the position of Slovakia using the correlation and multiple regression analysis and identifying the interrelationships between individual pillars and the GCI score in order to determine the impact of key factors that influence the competitive position and sustainable growth of Slovakia and improve or worsen its position. Our results highlighted the economic and statistical context of GCI Slovakia development and the impact of the following key pillars and key factors: pillar P1 (P1: Institutions – Public trust in politicians), pillar P3 (P3: Macroeconomic environment – Government debt) and pillar P11 (P11: Business sophistication – Nature of competitive advantage). All three pillars, identified as crucial to the development of the overall Slovakias' GCI scores, occupy unflattering positions in the comparison of pillar rankings. Therefore, we conclude that it is necessary to clarify the causes of their development and eliminate these identified factors as soon as possible. The results can be seen as beneficial to countries' economic policies in increasing global competitiveness.

The digital Thailand strategy and the ASEAN community

AbstractThe progress of Thailand's development needs to be monitored especially in the environment of the ASEAN Economic Community which started formally at the end of the year 2015. Furthermore, Thailand has also established the Thailand 4.0 strategy in alignment with the Thailand 12th Social and Economic Development Plan (2017–2021) and the ASEAN ICT Master Plan in order to drive the Thailand economy into a high‐income country and to be an ASEAN regional center. Because of the efficiency and effectiveness of ICT that can stimulate and support in most work areas, ICT aims to be the foundation of the country's development in other aspects. Thus, Thailand's Ministry of ICT has launched various ICT policies and programs for ICT administrators of different economic sectors because ICT has been considered as an engine of country development, and this causes Thailand to rely more on the adoption of ICT in various sectors. This study focuses on the progression of ICT development and investments, country infrastructures, the quality of the higher education system, business sophistication, and innovation, which are considered as the principal components of Thailand 4.0 strategy. The findings may assist the responsible authorities in both public and private organizations in monitoring, understanding, and expediting strategies and operations in order to achieve the objectives of Thailand 4.0 and to obtain competitive advantages across the ASEAN Economic Community. Furthermore, the findings also help to detect improvement of the Thailand's performance with respect to the 5 components development relative to the other ASEAN economies.

The Impact of Knowledge-Based Economy on Growth Performance: Evidence from MENA Countries

The aim of this paper is to examine the empirical relationship between the knowledge-based economy and economic growth in MENA countries. We are interested in identifying pillars linked with the transition to a knowledge-based economy that is related to growth performance. We used a growth model in Barro and Sala-i-Martin framework (1995) for the period of 2010–2015. It includes a panel data set that consisted the annual economic growth rate for selected MENA countries and, within the theoretical and empirical framework, applied the four indicators used for identifying the situation of the knowledge-based economy. The empirical results obtained using the generalized method of moments dynamic panel indicates institutions, human capital and research, infrastructure, and business sophistication to be the pillars of knowledge-based economy that influence a significant and positive economic growth in MENA countries. We suggest that governments in this region should consider the knowledge-related policies for accelerating transiting to the knowledge-based economy and improving economic performance.

Inovativnost zemlje u globalnoj trgovini - slučaj Republike Moldavije

The study highlights the importance of interaction between innovation, competitiveness and foreign trade. This study found the innovation competitiveness of a country is the main determinant for successful integration of country in the Global Value Chains (GVC). The purpose of research is to study the most problematic factors that affecting the innovation competitiveness of the Moldovan economy. The study is based on the analysis of the Republic of Moldova’s score and position in international indicators and rankings in correlation with the methodology of the World Economic Forum. The values of innovation, business sophistication and technological readiness factors of competitiveness between Moldova and South- Eastern Europe countries are analyzed in the paper. The study identified that the Republic of Moldova and Serbia recorded low indicators of the innovation and sophistication competitiveness in comparison with other countries of Southeast Europe. At the same time economy of Moldova follows the EU economies on the technological readiness, overcoming the Albanian and Serbian economy in the last years. The study showed that the need to raise the competitiveness by attracting foreign direct investments into research and development, information communication technologies as well as the high-value manufacturing and tradable sectors and by fully and efficiently implementing public institution reform, has become not only important but also urgent because the country is to be capable to strengthen the economic benefits that many countries have reached in past years. The results of study can be used in process of implementation of public administration reform, the elaboration of the National Program of science and innovation of the Republic of Moldova, the improving of governance the research and development in country.

THE PRIVATE DEMAND FOR INNOVATION: THE CASE OF EX - YU COUNTRIES

In the era of high sophisticated technology, the innovation is recognized as a key driver towards better national competitiveness and economic growth, creating opportunities for better employment and better responding to global social challenges. At the company level however, innovation improves efficiency, boosts company productivity and provides numerous benefits to the consumers. Being identified as a key variable for the importance of demand for innovation, buyer sophistication signals the ability of buyers to select products and services based on performance rather than price. Furthermore, the companies witnessing more sophisticated domestic market are likely to sell products with higher quality and to better understand the customers’ needs and how they perceive the value of the product. This paper aims to provide a comparative analysis of private demand for innovation in selected ex- YU countries using the two key indicators: “buyer sophistication” and “sales of new-to-market and new-to-firm product innovations for the period 2011-2016. Although sharing the same socio-political and historical background, the analysis of these selected countries show significant discrepancies among their business leaders’ assessments about the level of their customer demand for innovation and business sophistication.

Impact of European Integration on Competitiveness of Czech Regions

Economic integration supports removal of all obstacles (in economy, trade, tax, administration or industrial area) and establishment of common rules for market competition. Basic benefit of economic integration is thus occurrence of real or potential competitiveness effects. European integration can influence competitiveness of firm, regions or countries. There are existing agglomeration forces causing space and economic concentration and disperse forces working just opposite way. Both effects are influenced by access to a single market and removal of trade barriers. As a consequence, agglomeration effects are expected to dominate. European Commission established RCI (Regional Competitiveness Index) to enable comparison of competitiveness of European regions. Aim of this study is exploration of changes in competitiveness of Czech regions after accession to the European Union as there are no studies analysing regional competitiveness in Czech Republic as a consequence of European integration process via index based approach. Analysis of z statistics of primarily data published by European Commission is used to evaluate theoretical concept of disperse and agglomeration forces. Based on RCI analysis are obvious growing discrepancies with dominant position of Prague and Central Bohemia in comparison with other Czech Regions. Significant differences can be seen in areas of innovations, business sophistication and education. On the opposite, positively can be evaluated lower variability of competitiveness between Czech regions in indicators of infrastructure, institutions and technological readiness. Those indicators could be influenced by European cohesive and regional politics. Decisions on governmental level should follow Europe 2020 strategy and transformation to knowledge based economy.

Factores para medir la competitividad de la ciudad de Santa Elena, Provincia de Santa Elena (5311)

La competitividad en el sector empresarial se determina por la utilización de los recursos y la renovación de los factores productivos que genera, de una manera directa e indirecta, para lo cual utiliza diferentes medios y mecanismos de dinamismo. El presente trabajo buscó analizar la situación problemática de la competitividad del cantón Santa Elena. La investigación se basó en el análisis teórico práctico de los empresarios y sus diferentes actividades del sector productivo para validar los factores que de acuerdo con su criterio influyen en la competitividad. El principal aporte de la investigación es el establecimiento de factores productivos con poco resultado que conllevan a una débil estrategia administrativa lo cual no permite la visualización a corto plazo del crecimiento del sector productivo. Originando la propuesta de estrategias para desarrollar la competitividad en base a los resultados de la investigación, considerando los factores competitivos como, la Infraestructura y servicios básicos, la Salud, nutrición, educación, la Creación de Negocios, el Desarrollo y sofisticación empresarial, el comercio exterior y el Turismo.

Production efficiency measurement and its determinants across OECD countries: The role of business sophistication and innovation

Increasing efficiency and productivity should be at the core of the policy agendas of all governments. Knowing whether or not OECD economies optimize their resources in production is, therefore, an important policy issue. The purpose of this paper was to make cross-country comparisons of production efficiency, and its determinants, using mainly a parametric approach. Our proposed model was a stochastic frontier version of Battese and Coelli’s (1995) which includes both a stochastic error term and a term that can be characterized as inefficiency. The non-negative technical inefficiency effects are assumed to be a function of explanatory variables. The empirical analysis of macroeconomic performance done in this paper confirmed that OECD countries with a greater sophistication of their production processes and a higher capacity for innovation tend to be less inefficient Alternative non-parametric methods for evaluating the impact of process/contextual variables on efficiency also corroborated that business sophistication and innovation contribute to efficiency improvements across OECD countries.

Business Environment and Competitiveness of Czech Republic after Accession to the European Union

Purpose of the article: European Union can be considered as a full integration process including political, safety, social or economic aspects. Economic integration is process of interconnection otherwise separated national markets (by removal of economic borders). This assumes removal of all obstacles (in economy, trade, tax, administration or industrial area) and establishment of common rules for market competition. Basic benefit of economic integration is occurrences of real or potential competitiveness effects. Methodology/methods: European integration influenced number of factors of business environment mainly in area of legislation, taxes, public competition or harmonization of norms which can result in overall Czech Republic competitiveness abroad. In these papers have been used DB and GCI indexes and their subsequent indicators to analyze competitiveness and business environment in CR. Scientific aim: The aim of this article is research on impact of European integration on business environment and competitiveness of Czech Republic. Findings: Growing DTF trend for DB index since 2004 shows improvement of business environment after accession to the EU in contrast with non- EU members (Switzerland, Norway) which remains flat. The biggest benefit for Czech business environment seems to be trade liberalization as Czech companies were able to compete successfully at foreign markets. On the other hand, according to GCI remains biggest challenge non- effective bureaucracy, tax regulation, corruption, political instability and low business sophistication. Conclusions: Czech Republic should focus, consistently with Lisbon strategy, on qualification of labour forces, increase of innovation capacity and support of more sophisticated businesses with higher added value.

THE EXPLORATION OF THE RELATIONSHIPS BETWEEN THE GLOBAL COMPETITIVENESS, THE ICT AND EDUCATION

Information and Communication Technology (ICT) is a key element for development and economic expansion. However, many of the developing countries appear to gain only small fraction of the advantages from the ICT sectors. Indeed, developed countries are taking the most of the advantages and opportunities brought by the use of ICT. Therefore, it is necessary to highlight the essential role and the significant relationship of ICT and education for gaining the competitive advantage. In this regard, this study investigates the complex relationships of some of the global competitiveness indicators of the ICT, education and the business sophistication and innovation factors. In this study, several statistically significant relationships are explored by applying canonical correlation analysis. These findings and significant statistical results are highlighted.

AN EMPRICAL ANALYSIS OF DETERMINANTS OF KNOWLEDGE AND TECHNOLOGY OUTPUT: A PANEL DATA ANALYSIS

ABSTRACT Information technology outputs have taken its place on the basis of economic growth in the world particularly since the 1990s. With growing importance of human capital that was recognized as a production factor with internal growth models, identification of the factors that accelerate information technology outputs placed at the centre of economic progress gained importance. This paper deals with human capital and research, infrastructure, market sophistication, business sophistication and their effects on knowledge and technology output of 17 developing countries during the period 2011-2015. Using the Pooled Ordinary Least Squares method, this paper showed that infrastructure, market sophistication, business sophistication are significant variables in explaining knowledge and technology output. Keywords panel data analysis, technology, knowledge, market sophistication, business sophistication.

Global innovation index: Moving beyond the absolute value of ranking with a fuzzy-set analysis

This study applies a fuzzy-set qualitative comparative analysis to data from the Global Innovation Index (GII). Building on the National Innovation System's approach, this study posits that a country can achieve high innovation performance via several combinations of causal conditions. These conditions are the five input enablers of GII: institutions, human capital and research, infrastructure, market sophistication, and business sophistication. By defining two subsamples of countries (high-income and low-income), this study finds that several causal combinations of conditions lead to high innovation performance in both groups. In order to obtain better innovation performance, the low-income countries show more multifaceted solutions. These results indicate that none of the conditions is necessary for predicting high innovation performance in both samples. Additionally, in the low-income group, none of the conditions, individually, is sufficient to predict higher innovation performance, while in the high-income group the infrastructure and human capital and research conditions, on their own, are sufficient to obtain better innovation performance. These results indicate that the political decision-making processes required for improving the level of innovation need to be different for each group of countries.

Does Enhancing of the Competitiveness Influence on Foreign Direct Investments in Western Balkan Countries?

Foreign direct investments present a valuable source of national competitiveness as they have attributes of capital flows provide knowledge and technology transfer from one country to target country. In this paper are used variables defined by World Economic Forum which construct Global Competitiveness Index for assessing competitiveness of the country. The purpose of the research is to examine does the national competitiveness increase enhance the level of FDI flows in transition Western Balkan economies that are not yet full members of European Union. The findings claim that larger increase in FDI per capita stocks in majority analyzed countries would have if making infrastructure more competitiveness, accelerate their technological readiness and improve innovation while certain countries should work on health and primary education and higher education and training. According to the results, there is no correlation between FDI flows and macroeconomic environment, institutions, development of financial markets, good market efficiency, labor market efficiency and business sophistication. Applying benchmark method, it is established the most competitive WB country as benchmark value for other transition countries in its neighborhood for enhancing their competitiveness, specially in the regional market. Also, it is obtained what if analysis to detect potential rise of FDI per capita stocks as a consequence of potential changes in some competitiveness variables. It is also calculated the potential increase in FDI/capita due to similar changes in different competitiveness variables.

RFID usage in European enterprises and its relation to competitiveness

The radio frequency identification (RFID) is one of the most promising new technologies of modern economy, with a high potential of improving the efficiency and productivity of enterprises. The main goal of this study is to determine the extent of RFID usage in European (EU) countries and to estimate whether there is a relation between countries’ competitiveness and their levels of RFID usage. First, the trend of RFID usage among EU enterprises is analyzed for the years 2009, 2011, and 2014. Second, a cluster analysis is applied with the goal to create homogenous groups of countries according to the RFID application across different industries. Third, countries from different clusters were compared according to their competitiveness in 2014. Results revealed that enterprises in Europe differ substantially according to their RFID usage. Also, RFID usage is not evenly distributed among countries across different industries, since some countries were leaders in RFID usage in one industry while lagging behind in RFID usage in other industries. Finally, countries from clusters with a higher RFID usage level also have a higher level of technological readiness and innovation, while smaller differences were found in business sophistication.

Re-evaluation of global innovation index based on a structural equation model

ABSTRACTThe Global Innovation Index (GII) was proposed to observe the innovation capability and efficiency levels of individual countries using input and output factors. However, it does not consider potential structural relationships among factors affecting the innovation performance of a country. In this study, we proposed a structural equation model (SEM) based on the hypothesised national innovation structure among seven factors representing inputs (institution, human capital and research, infrastructure, market sophistication, and business sophistication) and outputs (knowledge and technology outputs, and creative outputs). Using GII data from 2013, we discovered that business sophistication and infrastructure have the strongest direct and indirect effects on creative output, respectively. In addition, a new ranking is obtained based on the fitted SEM. We provide feedback information to improve innovation capabilities.