Competitiveness of Nations in Selected SEE Countries

Abstract

There have been several attempts to benchmark competitiveness of nations and show that its levels have significant impact on the wealth measured by growth of GDP per capita, especially during the recession. Countries of South Eastern Europe including Serbia and Romania are going through deep recession, and some authors have confirmed that the level of competitiveness, measured by several existing indices, is highly influential on welfare and wealth of those countries. Some studies have confirmed that the Global Competitiveness Index - GCI is the most appropriate measurement tool for countries in the SEE region. However, the large number of variables composing GCI index does not allow observing particularities of individual countries. By the mean of factor analysis in this paper it was confirmed that it is possible to extract 11 statistically significant factors which explain the competitiveness level of the country, and enable comparison among countries differently than the original index. Moreover factorsLegal rights and Government impact stand out as a common variable for most SEE and especially for Romania and Serbia as principal generator for increasing competitivenes