Title: Is global competitive index a good standard to measure economic growth? A suggestion for improvement

Authors: Ruixia Xia; Tao Liang; Yali Zhang; Sibin Wu

Addresses: School of Economics and Management, Tongji University, Shanghai 200092, China. ' College of Business Administration, Liaoning Technical University, No. 188, Longwan South Street, Huludao, Liaoning, 125105, China. ' Department of Management Science and Engineering, School of Management, Northwestern Polytechnical University, Xi'an, Shaanxi, 710072, China. ' Department of Management, College of Business Administration, University of Texas-Pan American, 1201 W University Dr, Edinburg, TX 78541, USA

Abstract: Global Competitiveness Index (GCI) developed by the World Economic Forum (WEF) has been used as a standard to measure a country's competitiveness and therefore is expected to be related to economic strength and growth. However, if GCI can be used to predict future economic growth is lacking. We were motivated to fill such a research gap by showing the predictive validity of GCI relative to Total Entrepreneurial Activities (TEA) and national culture. Using data collected from 40 countries, we regressed the three indices on GDP growth rate over five years period. We found that individualism and power distance dimensions of national culture have better prediction power than GCI. Our results imply that WEF should refine GCI to include national culture so that GCI can become a much better predictor of economic growth. We make contributions to the community and society by suggesting ways to make GCI a better measurement of economic growth.

Keywords: GCI; Global Competitive Index; standards; services; economic growth; national culture; TEA; total entrepreneurial activities; growth measurement; competitiveness; entrepreneurship.

DOI: 10.1504/IJSS.2012.048438

International Journal of Services and Standards, 2012 Vol.8 No.1, pp.45 - 57

Published online: 04 Aug 2012 *

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