The international competitiveness of countries: Economic-mathematical approach

Abstract

This paper pursues three main objectives: (i) to review the existing theoretical approaches towards the phenomenon and definition of "national competitiveness" as an economic category; (ii) to analyze factors affecting the level of national competitiveness, and (iii) to define clusters of countries according to the level of their relative national competitiveness. The main focus is to identify the most appropriate definition of national competitiveness, to use a mathematical approach to test the main hypothesis (H1: there is high correlation between the competitiveness level and the list of factors that can potentially increase/decrease competitive advantages of a state). Data of Ukraine and 29 states that clustered to the same (II) stage of development according the Global Competitiveness Index 2004-2012 are taken for the research. The applied cluster analysis helped to solve the challenge of statistical research of national competitiveness as classifying of countries (data set of 36 states, 2004-2012 years) according to their competitiveness, taking into account national peculiarities. As well cluster analysis lets to test assumptions that there is an existence of some structure in the sample of countries.