Assessing the Countries’ Competitiveness Based on Value Added Concept

Abstract

The paradigms of global competitiveness are changed recently because of the new trade patterns and global production networks development. This tendency requires rethinking of national economic growth policy with focus on the impact of international competitiveness factors. This study investigates the impact of fundamental macroeconomic parameters on the global competitiveness. A set of 27 European countries is assessed in the period of 2006-2018 considering their economic performance and development. The determinants of growth and competitiveness are studied. The results show that competitiveness in European countries depends on exchange rate fluctuations. The paper provides comparative studies including developed countries, Central-East European countries, GIIPS countries and offers insight for policy formulation on growth and competitiveness. Ordinary least squares (OLS) with pooled data, panel data with fixed effects (FE), random effects (RE), and the dynamic panel data model were used as principal methods. The empirical findings obtained are particularly important to consider for economic policies and strategies of economic development.