defining and measuring competitiveness: a · pdf filebusiness competitiveness ......

International Journal of Basic & Applied Sciences IJBAS-IJENS Vol: 12 No: 02 31

123802-9090 IJBAS-IJENS © April 2012 IJENS I J E N S

Defining and Measuring Competitiveness: A Comparative Analysis of Turkey With 11 Potential Rivals

Neslihan Arslan* Hüseyin Tatlıdil**

ABSTRACT

In this paper, the concept of the competitiveness is tried to be disclosed by defining national competitiveness and measurement methods of competitiveness. However, there are large number of methods measuring competitiveness, the most leading and attractive ones are WEF’s Global Competitiveness Report, IMD’s World Competitiveness Yearbook, and IFC’s Business Competitiveness - Ease of Doing Business Report. The purpose of this paper is to describe the national competitiveness and to examine the variables and the indicators used for measuring the competition power. In addition, the paper aims at comparing Turkey with the countries which are regarded as the rivals or the potential rivals of Turkey according to the experts of World Bank, IMF, OECD and so on. In this regard, in this paper, a comparison will be made among BRIC (Brazil, Russia, India and China) +KM (South Korea, Malaysia) and CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) countries. Moreover, a general evaluation and discussion will be made based on the mentioned indices as the conclusion.

JEL Classification: F14, F15

Keywords: national competitiveness, measurement of competitiveness, competitiveness indices, multidimensional scaling

*Corresponding Author: Yıldırım Beyazıt University, Department of Economics, [email protected] ** Hacettepe University, Department of Statistics, [email protected]



1. Introduction

In the globalized world, the concept of the competitiveness has gained and has been gaining an unprecedented importance in the recent years. After 1970s, there occurred an increase in foreign direct investments of the countries causing a change in the business segment of the firms. Before 1970s, the activities of the firms were concentrated on the manufacturing sector with the primary products; however, during and after 1970s, the activities of the firm gave its place to technology intensive manufacturing and services sector. Therefore, 1970s can be regarded as the turning point in the view of globalization. Furthermore, during 1980s, many developing countries started to be more liberal in their economic policies. Privatization, increasing market economy, financial liberalization and the attempts of the countries for the articulation to the world economy existed in these countries started to be in great demand. Then, developing countries began to be more connected to each other which brought an increasing competition in the world. Owing to these changes observed in the world economy, firms in the developed and developing countries became more efficient and they became as a serious rival at the international markets. All these developments and changes gave rise to the increased volume of trade in the world and paved the way for accelerating competitiveness and prevailing globalization. In this regard, the concept of “international competition power” gained importance in the world. This implies that in general, international competition power is explained as the share of trade volume in the world trade that a country owns.

In the matter of “competition power” or “competitiveness” of a country, competitiveness is defined as "the ability of a country to produce goods and services that meet the test of the international markets and simultaneously to maintain and expand the real income and also rise the welfare level of its citizens" (Haque, 1995) [1]. However; the concept of competition power shouldn't be totally explained by only the ability of a country's productivity, it should also be explained by the firm level competition power and the industrial level competition power.

The purpose of this paper is to disclose the concept of the competition power of a country, to examine the variables and the indicators used for measuring the competition power, to compare the scores obtained from the indicators used for measuring competitiveness and to clarify the competitiveness of the countries which are revealed as the rivals of Turkey or the countries which are seen as the potential rivals for Turkey. In this regard, the competition power of 11 countries (Brazil, China, Colombia, Egypt, India, Indonesia, Malaysia, South Korea, South Africa, Russia and Vietnam) will be compared with Turkey in line with this purpose.

This paper consists of four sections; after the introduction section, in the second section literature search will be given in chronological order. In the third section, competition scores and the rankings of 11 countries according to the indices-related with competitiveness prepared by 3 institutions: World Economic Forum (WEF), International Institute for Management Development (IMD) and International Finance Corporation will be analyzed. Then, with regards to these scores and rankings, general situation for competitiveness of Turkey will be compared with that of mentioned countries. Moreover, which one of these indices is more reliable and when is more reliable will be elucidated by obtaining a correlation between these scores and rankings of three indices. In the fourth and final section, a general evaluation will be made for each country and the comparison of these countries with Turkey will be interpreted according to the rankings and score values of these three indices prepared by the mentioned institutions.



2. Literature Review

In his book “International Productivity and Competitiveness”, Bert G. Hickman (1992) defines international competitiveness as “the ability to sustain, in a global economy, an acceptable growth in the real standard of living of the population with an acceptably fair distribution, while efficiently providing employment for substantially all who can and wish to work and doing so without reducing the growth potential in the standards of living of future generations”. Hickman primarily focuses on the determinants of productivity growth while explaining the competitiveness on an international scale. The chapters of this book provide information about the concepts and measures of productivity and competitiveness and discuss the price and output conversion in international comparisons in the global perspective. The writer associates the international competitiveness highly with the growing productivity of a country depending on four criteria: the first one is the pace of productivity growth, the second one is past and present trade policies, the third criterion is the different pattern of technological change followed by a different economic system and special growth strategy, the fourth and the final criterion is particular characteristics of the countries, such as natural endowments, geographical location and their history (Hickman, 1992) [2].

In the article of “Measuring Competitiveness of National Economies with Emphasis on Slovenia” Stanovnik & Kovačič (2000), focuses on Slovenia when explaining the international competitiveness and the measurements of competitiveness of the countries. In this paper, international competitiveness is defined with respect to the definitions given by IMD and OECD. In line with the definition of IMD, competitiveness is defined as “to create added value and thus increase national wealth by managing assets and processes, attractiveness and aggressiveness, globality and proximity and by integrating these relationships into an economic and social model”, whereas OECD defines international competitiveness as “at which level a country can, under free and fair market conditions, produce goods and services which meet the test of international markets while simultaneously maintaining and expanding the real incomes of its people over the long term”. In addition to defining international competitiveness, this paper explains the methodological approaches to the measurement of competitiveness. With these approaches, the rankings of the competitiveness are also given with the focus on Slovenia in this paper (Stanovnik & Kovačič, 2000) [3].

In his book called “Creating an Internationally Competitive Economy”, Harry Bloch and Peter Kenyon (2001), contribute to answering the questions of “What does international competitiveness mean?” and “What can countries do to achieve international competitiveness?”.The main focus of this book is not only on the term of competitiveness which is generally reflected as the higher exports and higher imports, but on the potential measures of competitiveness as well. In this regard, potential measures of competitiveness are derived from approaches in the scope of economic analyses. In the second chapter of this book, international competitiveness is defined as “the ability of a country to realize central economic policy goals, especially growth in income and employment, without running into balance of payments difficulties” and the approaches to define the alternative measures are given in this chapter. In the subsequent chapters of this book, an index for the measurement of competitiveness called ICOM is developed and factors affecting international competitiveness in different sectors are interpreted (Bloch & Kenyon, 2001) [4].

Miozzo & Walsh (2006) shed light on the concept of international competitiveness with the perspective of technology in their book called “International Competitiveness and Technological Change”. In the first chapter of this book, indices related to the measurement of competitiveness published by International Monetary Fund (IMF), Organization for Economic Cooperation and Development (OECD), World Economic Forum (WEF) and Institute for Management



Development (IMD) are discussed and evaluated. The limitations and the weaknesses of these indices published by these four popular institutions are explained in this regard. Furthermore, in the subsequent chapters of the book, the concept of competitiveness is explicated as the matter of conventional macroeconomic policy. In line with this explanation, main difficulties with the concept of competitiveness are given (Miozzo & Walsh, 2006) [5].

3. Defining and Measuring Competitiveness • Defining Competitiveness

National competitiveness as “the catchphrase in the global world” refers to a country’s ability to create, produce, distribute and service products in the international trade while earning rising returns on its resources (Scott & Lodge, 1985) [6]. Although there are different criteria in determining the national competitiveness of the countries, competitiveness is substantially related with the productivity growth of the countries both at the macro and micro level. In this regard, national competitiveness is well enlightened by defining the national competitiveness at the firm level, at the industrial level and at the international level.

National competitiveness at the firm level implies the ability to make production at lower costs and higher quality. Therefore, the most important determinants of the competitiveness at the firm level are quality, cost (such as labor costs and cost of capital) and the price levels. For a country to be more competitive, the development of countries should be improved at the firm level with the help of firms’ increasing performance. National competitiveness at the industrial level is generally defined as the ability of an industry to achieve the highest level of efficiency to meet challenges posed by foreign rivals. In this regard, the term of “efficiency” has an important position since maintaining this efficiency is also crucial for the competitiveness at the industrial level. In the perspective of competitiveness at the international level, a country should have the ability to increase the welfare and real income levels by producing goods and services under fair international market conditions (Düzgün, 2007, pp. 422-424) [7].

Countries cannot be internationally competitive as a whole; however, they can have comparative advantage in certain products. In this regard, the performance of firms and industries play a crucial role for international competitiveness. In order for a country to achieve higher international competitiveness, firms and industries in that country should be in a good position in the view of competition.

• Measuring Competitiveness

Although there are different theoretical approaches to the measurement of competitiveness, three well known indices such as Global Competitiveness Report prepared by World Economic Forum (WEF), The World Competitiveness Yearbook prepared by Institute for Management Development (IMD) and Business Competitiveness- Ease of Doing Business Report prepared by International Finance Corporation (IFC) are substantially prominent. However, owing to different definitions, indices and data sources they use, rankings of competitiveness of countries are different. For example, Turkey is at the 39th position according to the World Competitiveness Yearbook by IMD, at the 59th rank according to the Global Competitiveness Yearbook by WEF and at the 65th position according to Business Competitiveness - Ease of Doing Business Report by IFC. So, it is necessary to analyze how these indices are generated to determine the source of this difference and also show the correlations between the ranks of these series.

WEF’s annually published Global Competitiveness Report carries out respective computations of the competitiveness index by different indicators. Global Competitiveness Report focuses on economic welfare and increasing standards of living while making computations and rankings of



the countries. Hence, indicators used in this yearbook are strongly regarded as the factors which are crucial for achieving high growth levels. In WEF’s Global competitiveness Report (GCR) 2011-2012, 116 lowest level variables are used for 142 countries and then these 116 variables are grouped into 12 pillars. These 12 pillars are the sources of national competitiveness according to WEF’s Global Competitiveness Report (WEF, GCR, 2011, pp 4-10) [8]. These 12 pillars are as follows:

� Institutions � Infrastructure � Macroeconomic Environment � Health and Primary Education � Higher Education and Training � Goods Market Efficiency � Labor Market Efficiency � Financial Market Development � Technological Readiness � Market Size � Business Sophistication � Innovation

These 12 pillars are then further grouped into 3 stages according to the stages of development.

Figure 1: Stages of 12 pillars of competitiveness according to Global Competitiveness Yearbook 2011-2012

Key for Factor-Driven economies

Key for Efficiency-Driven

economies

Key for Innovation-

Driven economies



Source: WEF, Global Competitiveness Report 2011-2012.

While computing the index and the score values of the countries, WEF uses a different weighting scheme in the Global Competitiveness Report. In computation of the aggregated index, every sub-factors and variables are assigned a different weight depending on the development levels of the countries which is determined by the GDP per capita levels of each country. The weighting scheme used in the computation of score values of the countries is given in the following table.

Table 1: Sub-index weighting scheme according to the Global Competitiveness Report

STAGES OF DEVELOPMENT Stage 1: Factor- Driven

Transition from Stage 1

to Stage 2

Stage 2: Efficiency-

Driven

Transition from Stage 2

to Stage 3

Stage 3: Innovation-

Driven

GDP per capita (US$) thresholds <2,000 2,000-2,999 3,000-8,999 9,000-17,000 >17,000

Weight for basic requirements sub index

60% 40-60 % 40% 20-40 % 20%

Weight for efficiency enhancers sub index

35% 35-50 % 50% 50% 50%

Weight for innovation and sophistication factors sub index

5% 5-10 % 10% 10-30 % 30%

Source: WEF, Global Competitiveness Report, 2011-2012.

Based on the sub - index weights displayed in the Table 1, WEF computes the score values of the countries and makes the ranking accordingly in the Global Competitiveness Report. After weighting, based on the values in Table 1, WEF and then weights pillars equally within each of these three categories of competitiveness factors. Thus, it becomes more inferable to obtain different score values for the countries at different development stages.

Table 2: Ranking and score values of Turkey according to 12 pillars of competitiveness in the Global Competitiveness Report

PILLARS RANK SCORE RANK SCORE

Basic Requirements 64 4,61

Institutions 80 3,69 Infrastructure 51 4,39 Macroeconomic Environment

69 4,76

Health and Primary Education

75 5,62

Efficiency Enhancers 52 4,22

Higher Education and Training

74 4,02

Goods Market Efficiency 47 4,38

Labor Market Efficiency 133 3,51 Financial Market Development

55 4,26

Technological Readiness 55 3,95

Market Size 17 5,19

Innovation and Sophistication Factors

58 3,62 Business Sophistication 58 4,09

Innovation 69 3,15 Source: WEF, Global Competitiveness Report 2011-2012



According to Table 2, Turkey highly benefits from its market size since Turkey is at the 17th rank, at the 47th rank in goods market efficiency and Turkey is at 51th rank in the view of infrastructure which is regarded as reasonably developed. However, regarding the labor market efficiency, health and primary education and higher education and training rankings, it is apparent that Turkey should improve its efficiency in the labor market and focus on improving its human sources by ameliorating health and education services for achieving higher development stages.

The World Competitiveness Yearbook annually published by Institute for Management Development (IMD) divides the variables used for the computing the national competitiveness into four groups and then these four groups are sub-divided into 5 sub-factors, which can be outlined as the following figure.

Figure 2: Factors of national competitiveness according to the World Competitiveness Yearbook 2011

Source: The World Competitiveness Yearbook 2011

These sub-factors are once again divided into several indicators which are totally 341 indicators for 59 economies (IMD, World Competitiveness Yearbook, 2011) [9]. IMD gives equal weights to 20 sub-factors in the computation of the scores and the ranking of the countries. According to The World Competitiveness Scoreboard 2011, Turkey is at the 39th rank.

Business Competitiveness - Ease of Doing Business Report prepared by International Finance Corporation (IFC) is also a source of computing the national competitiveness. According to Ease of Doing Business Report, 9 indicators are taken into account in the computation of the score values of the countries for 183 economies (IFC Ease of Doing Business Report, 2011) [10]. These indicators are given below:



Figure 3: Indicators for National Competitiveness used in Ease of Doing Business Report

Source: Ease of Doing Business Report prepared by IFC and World Bank.

Doing Business Report focuses on the business sector and evaluates the economies in the view of how difficult or easy for a business to run when complying with the regulations. This publication doesn’t include any macroeconomic conditions or financial systems while computing the score values; it just focuses on the business sector to understand the availability of regulatory environment for business.

According to the Ease of Doing Business Report, competitiveness rankings of Turkey and rankings of its 11 potential rivals is shown below in line with the indicators used in the report.

Table 3: Rankings of Turkey and 11 countries in line with the indicators used in the Ease of Doing Business Report

Indicators Brazil China Colombia Egypt India Indonesia Korea Malaysia Russia South Africa Turkey Vietnam

Starting a business 128 151 73 18 165 155 60 113 108 75 63 100

Dealing with construction permits 112 181 32 154 177 60 22 108 182 52 137 62

Registering property 122 38 55 93 94 98 74 60 51 91 38 43

Getting credit 89 65 65 72 32 116 15 1 89 2 72 15

Protecting investors 74 93 5 74 44 44 74 4 93 10 59 173

Paying taxes 152 114 118 136 164 130 49 23 105 24 75 124

Trading across borders 114 50 99 21 100 47 8 37 162 149 76 63

Enforcing contracts 98 15 150 143 182 154 5 59 18 85 26 31

Closing a business 132 68 29 131 134 142 13 55 103 74 115 124

Source: Ease of Doing Business Report prepared by International Finance Corporation and World Bank



According to Table 3, Turkey is at a more advantageous position than these countries in the view of enforcing contracts, registering property, protecting investors and starting a business, however, it is at a worse position in the view of dealing with construction permits and closing a business. So, according to these rankings, Turkey should emphasize on the areas on which it has a lower level of ranking.

Under the light of what have been mentioned above, these three indices have some differences in the scope of their purpose. At the onset, it is noteworthy to say that Ease of Doing Business Report is slightly different than the others since it doesn’t take into account the macroeconomic and financial environment in a country. Therefore, it is logical to compare the World Competitiveness Yearbook (IMD) and Global Competitiveness Report (WEF) in the view of reliability of the indices. According to these three indices, rankings of Turkey and 11 countries as the potential rivals to Turkey are given below:

Table 4: Rank and Score Values of Turkey and other 11 countries

Global Competitiveness

Report 2011-2012 (WEF) World Competitiveness

Report 2011 (IMD) Ease of Doing Business

Report (IFC) 2011

Countries Rank Score Rank Score Rank Brazil 53 4,32 44 61,04 127

China 26 4,90 19 81,10 79

Colombia 68 4,20 46 59,77 34

Egypt 94 3,88 53(*) 50,55(*) 94

India 56 4,30 32 70,65 134

Indonesia 46 4,38 37 64,61 121

Korea 24 5,02 22 78,50 16

Malaysia 21 5,08 16 84,12 21

Russia 66 4,21 49 58,38 123

South Africa 50 4,34 52 56,86 39

Turkey 59 4,28 39 63,79 65

Vietnam 65 4,24 36 (*) 65,36(*) 78 Source: The World Competitiveness Yearbook 2011, Ease of Doing Business Report 2011 and the Global Competitiveness Yearbook 2011-2012

* Since these values are not given in IMD’s Global Competitiveness Yearbook, they’re estimated by using missing value obtaining techniques.

Table 4 gives the rankings of mentioned countries based on three well known competitiveness indices. So, it is clearly seen that ranking of a country is different for each index. This situation arises from the difference in the variables used in the indices and weighting scheme assigned for each variable. First of all, IMD and WEF don’t use the same variables, for example WEF uses 116 variables in its computation of national competitiveness, whereas IMD uses 341 variables in its computation and these variables are changing. Moreover, while WEF gives specific and unequal weights for each indicator, IMD assigns equal weights for all variables. So, it is not something surprising to encounter such a difference in the rankings of the countries. Nevertheless, to determine which index is more reliable and more accurate, correlations between these indices may be guiding. In this regard, the correlation between WEF’s Global Competitiveness Index and Doing Business Report is 0.408, the correlation between IMD’s World Competitiveness Yearbook and Doing Business Report is 0,305 and the correlation between WEF’s Global Competitiveness Index and IMD’s World Competitiveness Yearbook is 0,867. Nevertheless, after the estimation,



these correlations are 0,408, 0,326 and 0,840 respectively. So, this clearly shows that after the estimation of IMD ranks and score values for Egypt and Vietnam, the rank coefficient correlations have increased. According to these correlations, it can be deducted that WEF and IMD are using approximately similar variables or proxies related with the variables in their calculations but since the variables used in these indices are not totally same, there occurs differences in the rankings of the countries.

In comparison of WEF’s Global Competitiveness Index and IMD’s World Competitiveness Yearbook, IMD’s World Competitiveness Report is useful for different communities since it uses larger amount of variables than WEF. This Report addresses to business sector, academy and also to the government. Nevertheless, IMD gives equal weights to the variables while computing the index, but, WEF uses a different weighting scheme in its computations. The methods used in these indices show that WEF focuses on the variables which are suitable for achieving high economic growth and WEF’s Global Competitiveness Index is more appropriate for the developed countries in this respect. Therefore, it receives more attention in the world and it is regarded as more reliable.

As can be seen in Table 4 given above, according to WEF’s Global Competitiveness Yearbook, Malaysia is at the first position whereas Turkey is at 8th position compared to Turkey’s 11 potential rivals. According to IMD’s World Competitiveness Report, again Malaysia is at the first position and Turkey is at 6th position and according to the IFC’s Ease of Doing Business Report, whereas Korea is at the first position, Malaysia is at the second position and Turkey is at 5th position when compared to the11 potential rivals of Turkey. Since these rankings are different for each country, it is logical to calculate the top percentage values for each country in order to evaluate all indices on the same scale. These percentage values can be seen in the following figure:

Figure 4: Percentages of the ranking for each index

Source: WEF, IMD, IFC Rankings

Percentages of the rankings can be seen from the figure given above. These percentages are calculated by dividing the rankings to the number of the economies used in each index. Based on



this graph, Turkey lies in top 36% (59/142) of the 142 countries according to WEF’s Global Competitiveness Index, lies in top 66% (39/59) of the 59 countries according to IMD’s World Competitiveness Yearbook and lies in top 42 % (65/183) of the 183 countries according to IFC’s Ease of Doing Business Report. To determine the reliability of this method, it is necessary to look at the correlations of the indices after taking percentages of the rankings. As can be seen from the figure given above, the percentage values of each index moves on the same direction. After taking the percentages of the rankings of each index, the correlation between WEF and IMD is 0,837, the correlation between WEF and IFC is 0,397 and the correlation between IMD and IFC is 0,331. These correlations of percentage rankings are approximately same as the correlations of rankings of each index. So, it implies that taking the percentages of the rankings for each index is beneficial to interpret the competitiveness of the mentioned countries.

These countries can be grouped according to the multiple dimensional scaling: Euclidian distance model given below to understand the distances between observations and then to group them accordingly. Furthermore, by multidimensional scaling, the relationships of the rankings can be evaluated.

Dimension 1

210-1-2

Dimension 2

1,5

1,0

0,5

0,0

-0,5

-1,0

-1,5

VietnamTurkey

SouthAfrica

Russia

Malaysia

Korea

Indonesia

India

Egypt

Colombia

China

Brazil

Figure 5: Multidimensional Scaling: Euclidean Distance Model

Source: WEF, IMD and IFC. According to the figure given above, these countries can be categorized into three groups in line with dimension 1. So, since the proximities between the distances; Korea and Malaysia are in Group1, China, Turkey, Vietnam, South Africa and Colombia are in Group2 and India, Indonesia, Brazil, Russia and Egypt are in Group3. Based on these groups, it can be said that countries in Group1 are at a more advantageous position than the countries in Group2 and 3 since the rankings of Malaysia and Korea are higher. According to the Group2, South Africa, Turkey, Vietnam, Colombia and China are at the approximately same competitive position. This interpretation is also valid for the countries in Group3 such that India, Indonesia, Russia, Brazil and Egypt are regarded as the countries at the approximately same competitiveness level.



4. Conclusion and Discussion

Competition power of a country can simply be defined as the ability to compete relative to its rivals. In this paper, competition power of a country is defined at the firm level, at the industrial level and also at the international level. So, it is obvious to say that for a country to achieve higher competitiveness, it should improve its competitiveness both at the firm level and at the industrial level. In the view of the measurement of competitiveness, there are three leading indices used in the world such as WEF’s Global Competitiveness Yearbook, IMD’s World Competitiveness Report and IFC’s Ease of Doing Business Report. By examining these indices, it is seen that the rankings of the countries vary according to the methods used in these indices. Correspondingly, it is seen that whereas WEF’s Global Competitiveness Yearbook widely gains acceptance, IMD’s World Competitiveness Report is more suitable and appealing for business sector, academy and also to the government.

It is very difficult to say that these three indices show the same results since they focus on different fields and give different weights when making computations of their indices. Moreover, WEF, IMD and IFC are using different number of countries when calculating the rankings. While WEF and IFC are using 142 and 183 countries respectively, IMD uses only 59 countries in its calculations. If IMD increases the number of the countries in its calculations, then IMD’s ranks converge to the ranks of WEF and IFC, because IMD doesn’t include the undeveloped or under developed countries to its calculations.

In order to evaluate these indices on the same scale, rankings are taken as percentages by dividing the ranks of the countries to the number of the countries. So, by this method, it is possible to say that Turkey lies in top 36 % of the 142 countries according to WEF’s Global Competitiveness Index, lies in top 66 % of the 59 countries according to IMD’s World Competitiveness Yearbook and lies in top 42 % of the 183 countries according to IFC’s Ease of Doing Business Report. Moreover, to understand the similarities of the data and the proximities between the countries, multidimensional scaling is used, as a result, these 12 countries are divided into three groups, Malaysia and Korea are in the first group, South Africa, Turkey, Vietnam, Colombia and China are at the second group and India, Indonesia, Russia, Brazil and Egypt are at the third group. This implies that in the view of competitiveness, countries in each group are at the similar competition level.

For Turkey, to be more competitive internationally, necessary precautions should be taken against increasing market economy and defending its economy in case of an economic crisis. Establishment of a good balance between fiscal and monetary policies is also of a great importance. For a sustainable development and thus for achieving higher competition rankings, achieving a steadiness in exchange rates, interest rates, inflation, growth and employment simultaneously is very crucial. So, for this to be applicable, both fiscal and monetary policies should be used correctly. Current account deficit that a country runs is also an important factor decreasing the competitiveness level. Therefore, achieving a current account balance will be important in raising the competition power of a country in the international area. Furthermore, any factor affecting the economies adversely should be kept down. In another perspective, since firms and industries play an important role in the international competitiveness, firms’ investment opportunities should be developed by enlarging capital facilities in the new areas, and also policies increasing R&D opportunities in promising industrial sectors should be followed. Inadequacy in the productivity levels of a country should be prevented by increasing technology intensive methods since competitiveness of a country is highly linked with the productivity growth.



REFERENCES

[1] Haque, I., (1995), “TechnologyandCompetitiveness” Chapter 2 in Trade, Technology and International Competitiveness, the World Bank. [2] Hickman, B. G., (1992), “International Productivity and Competitiveness”, Oxford University Press. [3] Stanovik P. &Kovačič, A. (2000), “Measuring Competitiveness of National Economies with Emphasis on Slovenia”, Working Paper No: 6, Institutefor Economic Research. [4] Bloch, H. &Kenyon, P. (2001), "Creating an Internationally Competitive Economy", Palgrave Publishers. [5] Miozzo, M. & Walsh, V. (2006), "International Competitiveness and Technological Change", Oxford University Press. [6] Scott, B. R. and Lodge, G. C. (1985) “US Competitiveness in the World Economy” , Boston: Harvard Business School Press [7] Düzgün, R., (2007), “Türkiye’ninUluslararası RekabetGücü: ÇokDeğişkenli Đstatistiksel BirAnaliz”, SosyalBilimlerEnstitüsüDergisi, Sayı: 23. [8] World Economic Forum, (2011), “Global Competitiveness Report 2011-2012”, Geneva. [9] Institute for Management Development, (2011), “World Competitiveness Yearbook”, Geneva. [10] International Financial Corporation & World Bank, (2011), Ease of Doing Business Report.

APPENDIX

Appendix 1: WEF’s Global Competitiveness Index 2011-2012, page 15, retrieved from http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2010-11.pdf

Appendix 2: IMD’s The World Competitiveness Scoreboard 2011 retrieved from http://www.imd.org/research/publications/wcy/upload/scoreboard.pdf

Appendix 3: IFC’s Ease of Doing Business Report 2011, page 4, retrieved from http://www.doingbusiness.org/~/media/FPDKM/Doing%20Business/Documents/Annual-

Reports/English/DB11-FullReport.pdf