A new taxonomy of country performance and risk based on economic and technological indicators

Abstract

This paper proposes a new taxonomy for countries based on principal component analysis. The paper investigates 51 countries using a set of 13 indicators of economic and technological performance for the period 2000-2002. The methodology reduces the variables and groups the countries that show similar strategic behaviour in the global market. The taxonomy facilitates the identification of country performance and risk, and provides relevant information both to international investors and to policy-makers, who must decide about global investment strategies and economic policies.