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Exploring Global Competitiveness Index 4.0 through the lens of country risk

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  • Qazi, Abroon

Abstract

The Global Competitiveness Index (GCI) 4.0 provides an annual evaluation of country-level productivity and development in the fourth industrial revolution era. The GCI 4.0 is classified into 12 pillars representing socioeconomic, financial, health, technological, and other factors of production. Country risk, which is an aggregate measure of country-level exposure to financial, political, and economic risks, can influence national development. This study explores the association between country risk and competitiveness by mapping country risk drivers to GCI and GCI pillars to country risk. Two Bayesian Belief Network models, with a minimum prediction accuracy of 81.3 %, are developed using two data-sets representing the GCI and country risk ratings of 107 countries. Sensitivity analysis reveals that low performance in information and communication technology (ICT) adoption (monetary policy) can significantly affect country risk (GCI), whereas innovation capability (financial system risk) and institutions (legal system) can considerably improve country risk (GCI). By delving into how the pillars of competitiveness interact with various risk factors such as political stability, economic volatility, and regulatory environment, decision-makers, investors, and policymakers can gain valuable insights that guide effective resource allocation, risk mitigation strategies, informed policy formulation, and sustainable development efforts.

Suggested Citation

  • Qazi, Abroon, 2023. "Exploring Global Competitiveness Index 4.0 through the lens of country risk," Technological Forecasting and Social Change, Elsevier, vol. 196(C).
    • Handle: RePEc:eee:tefoso:v:196:y:2023:i:c:s0040162523005413
    DOI: 10.1016/j.techfore.2023.122856
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