Management summary Research study M. Nečadová „Impact of Aggregation Methods on Countries’ Ranking in Composite Index of National Competitiveness“
The Global Competitiveness Index (GCI) is widely accepted by policymakers and other authorities for its ability to integrate a significant amount of relevant information about competitive advantages and disadvantages of countries on different levels of development. The explanatory power of this international ranking depends strongly on the choices made during the process of construction of the composite index (CI). Being inspired by the new WEF methodology (the GCI 4.0), adjusted weighting schemes (the AGCI3, AGCI12, GAGCI3, GAGCI12) were used with the aim to offer the relevant alternative to the original weighting scheme applied by the WEF (different weights of the sub-indices and pillars for different groups of countries divided according to their stages of development). Our alternatives to the WEF’s weighting scheme are based on the same weights being applied to all countries. In this point of view, our alternatives to the GCI prove to be fairer (unbiased) and are able to decrease the distortions caused by the economic, social and cultural differences among countries (the so-called national bias). Our main finding is that the weighting scheme, the variability among pillars and sub-indices for the given country (measured by the standard deviation of pillars), and the predisposition of pillars to affect the countries’ ranking (measured by the variability among the countries in the given pillars) have an essential impact on the countries’ ranking.
Target groups of stakeholders: stakeholders and professional public interested in the measurement of national competitiveness
Citation: Nečadová, M. (2020). Impact of Aggregation Methods on Countries’ Ranking in Composite Index of National Competitiveness. Malaysian Journal of Economic Studies, 57(1), 20.