World economy and international economic relations

The EU Global Competitive Force Index

Economic Annals-XXI

Economic Annals-ХХI: Volume 183, Issue 5-6, Pages: 17-25

Citation information:
Zayats, O. (2020). The EU Global Competitive Force Index. Economic Annals-XXI, 183(5-6), 17-25. doi: https://doi.org/10.21003/ea.V183-02

View Full-TextDownload PDF

Olena Zayats
PhD (Economics),
Assistant Professor,
Department of International Economics,
Uzhhorod National University
14 Universytetska Str., Uzhhorod, 88000, Ukraine
olena.zayats@uzhnu.edu.ua
ORCID ID: https://orcid.org/0000-0001-9904-8706

The EU Global Competitive Force Index

Abstract. Introduction. With this paper we want to show that the study of international competitiveness only at a country level does not correspond to the contemporary development of the global economy. The author presents the methodology for competitiveness grouping of international integration groupings’ member states in order to assess the global competitive force of trade and economic groupings in the world economy. Based on the data of the Global Competitiveness Report 2019 regarding the competitiveness of the EU Member States, the Global Competitive Force Index of the EU as an interstate integration grouping has been calculated. The Index will help evaluate economic integration or disintegration processes in the global economy. The research demonstrates the necessity of the annual global competitive force ranking of international integration groupings.

This study will enhance knowledge in the field of economics by grouping the EU Member States’ global competitiveness indices according to 12 criteria and identifying the new quantitative and qualitative integrated Global Competitive Force Index of an international integration grouping. To reach this objective, we will define the Integrated Global Competitive Force Index as the average of the individual points of the EU Member States in 2019.

The novelty of our study lies in the comparative analysis of the three largest interstate integration groupings from the perspective of their competitive force. The introduction of the new integrated Global Competitive Force Index of interstate integration groupings will help competition policy makers decide which processes of economic integration or disintegration should be preferred in order to increase their competitive force in the global economy.

The purpose. Research and calculation of the European Union’s Integrated Global Competitive Force Index to analyze the attractiveness of the European Union in terms of global competitive force. Based on the calculation of the EU Integrated Global Competitive Force Index 2019, the attractiveness of the EU competitive environment has been determined according to 12 criteria.

Results. The ranking of the three largest regional integration groupings of the world economy has been formed. Specification of the assessment and results of the integrated index of interstate integration groupings’ global development can be used for the competition policy development of the individual member state of an integration grouping as well as the communitarian competition policy. The EU Integrated Global Competitive Force Index will help understand what the integration grouping’s competitive force means and whether the process of interstate integration of countries contributes to enhancing the competitive force of an individual country and the integration grouping as a whole. To calculate the EU Integrated Competitive Force Index, we will analyze the Member States on 12 competitive strength criteria, and Global Competitiveness Report 2019 will serve as the basis for our study. According to our calculations, the EU Integrated Global Competitive Force Index is 72 points out of 100.

Conclusion. The results of a comprehensive integrated assessment of the competitive force of 28 EU Member States demonstrate a high overall competitive force index of the grouping, indicating the EU’s impact on global competitive processes. The EU Global Competitive Force Index can be used both as an indicator of the separate international integration grouping’s development and as a global criterion for the effectiveness of interstate integration groupings in the transformation of international competitive relations.

Discussion. The highlighting of the EU global competitive force is a requirement for the contemporary development of the global competitive environment, since interstate integration groupings are the main actors of the world economy, which significantly affect the distribution and growth of competitive force.

Keywords: Global Competitiveness Index; Member States of the European Union; Competitive Force of Interstate Integration Grouping; EU Competition Policy; EU Competitive Status in Global Economy

JEL Сlassіfіcatіon: F00; F01; F02; F12; F15

Acknowledgements and Funding: The author received no direct funding for this research.

Contribution: The author contributed personally to this work.

DOI: https://doi.org/10.21003/ea.V183-02

References

  1. Aiginger, K. (2006). Competitiveness: From a Dangerous Obsession to a Welfare Creating Ability with Positive Externalities. Journal of Industry Competition and Trade, 6, 161-177.
    doi: https://doi.org/10.1007/s10842-006-9475-6
  2. Aiginger, K., & Vogel, J. (2015). Competitiveness: from a misleading concept to a strategy supporting Beyond GDP goals. Competitiveness Review, 25(5), 497-523.
    doi: https://doi.org/10.1108/CR-06-2015-0052
  3. Annoni, P., & Dijkstra, L. (2019). The EU competitiveness report 2019.
    Retrieved from https://ec.europa.eu/regional_policy/sources/docgener/work/2019_03_rci2019.pdf
  4. Arribas, I., Bensassi, S., & Tortosa-Ausina, E. (2020). Trade integration in the European Union: Openness, interconnectedness, and distance. The North American Journal of Economics and Finance, 52, 101167.
    doi: https://doi.org/10.1016/j.najef.2020.101167
  5. Bankova, Y. (2013). National Competitiveness Levers: How it Looks in Bulgaria. Economic Alternatives, 1, 66-80.
    Retrieved from https://www.researchgate.net/publication/304252415_
    National_Competitiveness_Levers_How_it_Looks_in_Bulgaria
  6. Burger, M. J., van der Knaap, B., & Wall, R. S. (2013). Revealed competition for greenfield investments between European regions. Journal of Economic Geography, 13(4), 619-648.
    doi: https://doi.org/10.1093/jeg/lbs024
  7. Campos, N., Coricelli, F., & Moretti, L. (2019). Institutional integration and economic growth in Europe. Journal of Monetary Economics, 103, 88-104.
    doi: https://doi.org/10.1016/j.jmoneco.2018.08.001
  8. Cann, O. (2016). What is competitiveness? World Economic Forum.
    Retrieved from https://www.weforum.org/agenda/2016/09/what-is-competitiveness
  9. Cernescu, L., Bitea, C., & Dungan, L. (2018). The Analysis of the Romanian Global Competitiveness International Ranking. The impact of the IEC Program. Procedia – Social and Behavioral Sciences, 238, 517-526.
    doi: https://doi.org/10.1016/j.sbspro.2018.04.031
  10. Cutrini, E. (2019). Economic integration, structural change, and uneven development in the European Union. Structural Change and Economic Dynamics, 50, 102-113.
    doi: https://doi.org/10.1016/j.strueco.2019.06.007
  11. European Commission. (2019). Cluster programmes in Europe and beyond.
    Retrieved from https://www.eucluster2019.eu/files/events/4538/files/eocic-cluster-programme-report.pdf
  12. Falk, R. (1999). World Orders, Old and New. Current History, 624(98), 39-34.
  13. Gibert, J., & Muchova, E. (2018). Export competitiveness of Central and Eastern Europe since the enlargement of the EU. International Rewiew of Economics & Finance, 55, 78-85.
    doi: https://doi.org/10.1016/j.iref.2018.01.008
  14. Hellwig, M. (2019). Competitiveness as doublespeak.
    Retrieved from http://foolsgold.international/interview-martin-hellwig-competitiveness-doublespeak
  15. Karreman, B., Burger, M., & Eenennaam, F. (2019). Revealed competition between cluster organizations: An exploratory analysis of the European life sciences sector. EPA: Economy and Space, 51(3), 705-723.
    doi: https://doi.org/10.1177/0308518X18802325
  16. Krugman, P. (1994). Competitiveness: A Dangerous Obsession. Foreign affairs, 73(2), 28-44.
    Retrieved from https://pdfs.semanticscholar.org/4c16/a551a1761792f06edcee31f2b6dbd2636566.pdf
  17. Krugman, P. (1996). Making sense of the competitiveness debate. Oxford review of economic policy, 12(3), 17-25.
    Retrieved from https://www.staff.ncl.ac.uk/david.harvey/ACE2006/Competition/KrugmanComp.pdf
  18. Latorre, M., Olekseyuk, Z., Hidemichi, Y., & Sherman, R. (2020). Making sense of Brexit losses: An in-depth review of macroeconomic studies. Economic Modelling, 89, 72-87.
    doi: https://doi.org/10.1016/j.econmod.2019.10.009
  19. Orlowski, L. (2020). Capital Markets Integration and Economic Growth in the European Union. Journal of Policy Modeling, 42(4), 893-902.
    doi: https://doi.org/10.1016/j.jpolmod.2020.03.012
  20. Plakandaras, V., Kumar Tiwari, A., Gupta, R., & Qiang, Ji. (2020). Spillover of sentiment in the European Union: Evidence from time- and frequency-domains. International Review of Economics & Finance, 68, 105-130.
    doi: https://doi.org/10.1016/j.iref.2020.03.014
  21. Porter, M. (1990). The Competitive Advantage of Nations. Harvard Business Review, 68, 73-91.
    Retrieved from http://www.economie.ens.fr/IMG/pdf/porter_1990_-_the_competitive_advantage_of_nations.pdf
  22. Reinert, E. (1994). Competitiveness and its predecessors – a 500-year cross-national perspective.
    Retrieved from https://mpra.ub.uni-muenchen.de/48155/1/MPRA_paper_48155.pdf
  23. Schwab, K. (2017). The Fourth Industrial Revolution.
    Retrieved from https://luminariaz.files.wordpress.com/2017/11/the-fourth-industrial-revolution-2016-21.pdf
  24. Scott, B. R., & Lodge, G. C. (1985). US Competitiveness and the World Economy. Boston: Harvard Business School Press.
  25. Shaxson, N. (2020). The Competitiveness Files.
    Retrieved from https://www.taxjustice.net/2020/01/06/the-competitiveness-files-martin-wolf
  26. Stojcic, N., Vojinic, P., & Aralica, Z. (2018). Trade liberalization and export transformation in new EU member states. Structural Change and Economic Dynamics, 47, 114-126.
    doi: https://doi.org/10.1016/j.strueco.2018.08.004
  27. Szczepański, M. (2019). EU competition policy: Key to a fair single market.
    Retrieved from https://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_IDA(2019)642209
  28. The European Court of Auditors. (2018). Enforcement of EU competition policy.
    Retrieved from https://www.eca.europa.eu/Lists/ECADocuments/BP_COMPETITION/BP_COMPETITION_EN.pdf
  29. Veld, J. (2019). The economic benefits of the EU Single Market in goods and services. Journal of Policy Modeling, 41(5), 803-818.
    doi: https://doi.org/10.1016/j.jpolmod.2019.06.004
  30. World Economic Forum. (2006). The Global Competitiveness Report 2006-2007.
    Retrieved from http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2006-07.pdf
  31. World Economic Forum. (2019). The Global Competitiveness Report 2019.
    Retrieved from http://www3.weforum.org/docs/WEF_TheGlobalCompetitivenessReport2019.pdf

Received 1.02.2020
Received in revised form 20.02.2020
Accepted 26.02.2020
Available online 4.06.2020
Updated version of the paper as of 25.08.2020

View Full-TextDownload PDF
In, , , , , ,

More Papers