A two-stage OGI approach to compute the regional competitiveness index

Abstract

Purpose

Regional competitiveness refers to the capacity of a region to manage its resources and competencies to increase the well-being of its people. Measuring regional competitiveness is, thus, a major consideration for policymakers, businesses and the academic community in their endeavour to improve the same. This paper aims to demonstrate a novel way to calculate the regional competitiveness index under a two-stage objective general index (OGI) framework.

Design/methodology/approach

The authors compute the regional competitiveness index under a two-stage OGI framework. In the first stage, they aggregate the sub-factor level information into a factor level index; in the second stage, they use the factor level index to obtain a regional competitiveness index.

Findings

The authors discuss the properties of the proposed index in detail. They further analyse five periods of regional competitiveness of Peru spanning the period 2008-2015. Among others, the results reveal the existence of the resource curse of the mining regions of Peru.

Practical implications

The paper is a contribution to the practical measurement of competitiveness.

Social implications

The calculation of a regional competitiveness index is vital for improving the competitiveness of the countries and for reducing regional inequalities.

Originality/value

When compared to the existent methods available in the literature, the advantage of the proposed method resides in the fact that the derived index has a positive correlation with the factor-level indices and the factor-level indices have a positive correlation with the sub-factor-level information.

Citation

Charles, V. and Sei, T. (2019), "A two-stage OGI approach to compute the regional competitiveness index", Competitiveness Review, Vol. 29 No. 2, pp. 78-95. https://doi.org/10.1108/CR-08-2017-0050