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Article
Publication date: 13 September 2021

Paulo Cesar Bontempo

The purpose of this study is to analyze how institutional governance and business environment affect countries’ competitiveness and their relative importance.

Abstract

Purpose

The purpose of this study is to analyze how institutional governance and business environment affect countries’ competitiveness and their relative importance.

Design/methodology/approach

In this paper, the authors analyze how institutional governance and business environment affect countries’ competitiveness, their relative importance and what are the implications for Brazil. The authors have collected data from 131 countries related to the institutional governance, business environment and competitiveness of these countries. For the analysis of the mentioned influences, the technique of partial least squares structural equations modeling is used.

Findings

Results indicate that the main role in countries’ competitiveness is played by the quality of institutional governance. The quality of the business environment reinforces the positive effect of the quality of institutional governance on countries’ competitiveness (mediation effect). Brazil has poor governance quality indicators when compared to high-middle income countries, especially regarding government effectiveness, political stability and control of corruption.

Research limitations/implications

The study provides a better understanding of the relative importance of governance quality and business environment quality for countries’ competitiveness. One limitation of this study is that the research was restricted to data related to the year 2019.

Practical implications

For strategists and decision-makers, understanding these effects on countries’ competitiveness and their relative importance is fundamental to understanding what makes their companies internationally competitive.

Social implications

The presence and appreciation of institutional governance quality need to be cultivated in society.

Originality/value

Instead of using the original diamond model, which presents circular relationships, the authors have used the business environment construct, composed of elements of the diamond model to test the relationships between the quality of institutional governance, competitiveness and the business environment.

Details

RAUSP Management Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2531-0488

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Book part
Publication date: 19 June 2019

Junhong Im and Sung Hyo Hong

This chapter estimates the average wage and land price for each area through regression analyses to control for heterogeneity of workers and land across areas. Based on…

Abstract

This chapter estimates the average wage and land price for each area through regression analyses to control for heterogeneity of workers and land across areas. Based on these quality-adjusted averages of wage and land price, we calculate each area’s business (Q B) and residential environment index (Q H) following Gabriel and Rosenthal (2004) and list the top 20 and bottom 20 locations in terms of Q B and Q H values, respectively. The findings of this chapter can be summarized as follows. First, metropolitan areas are perceived overall as relatively better locations both for firms and for workers. However, the quality of business environment and the quality of life do not necessarily match across locations. Second, while the college-educated and the young are more likely to live in the locations with better quality of business and residential environment, the old tend to live disproportionately in the locations with inferior local amenities possibly due to financial constraints. Firms newly established, belonging to headquarters, or in business service industries locate more heavily in the locations with better quality of business environment, but not necessarily in the locations with greater quality of life. However, manufacturers seem to locate their plants more in the places with lower quality of business environment. Consequently, the degree to which local amenities vary across areas seems to be remarkable in Korea. Since compensating differentials are prone to be self-reinforcing, the policy efforts by the local or central government are important for future balanced growth.

Details

Asia-Pacific Contemporary Finance and Development
Type: Book
ISBN: 978-1-78973-273-3

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Article
Publication date: 31 December 2003

Roel Spee and Wim Douw

Increasing competition in the market causes continued pressures for many companies to control or reduce costs. This has led to various responses by companies to seek more…

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2947

Abstract

Increasing competition in the market causes continued pressures for many companies to control or reduce costs. This has led to various responses by companies to seek more efficient operating models, in which the location where activities are performed has become a key determinant. The fast pace at which many low‐cost regions are developing into acceptable business environments has offered enormous opportunities for companies to change their geographic network of operations. The result is an ongoing shift of activities from welldeveloped, but high‐cost areas to low‐cost locations elsewhere in the world. This paper describes the relocation trends in the last decade, the drivers for cost reduction and the responses of companies. A location evaluation approach is described which helps to understand the cost and quality of doing business in various locations. Typically, there is a trade‐off between those two dimensions: low‐cost locations offer lower quality, whereas higher‐quality locations are more expensive. The challenge for companies aiming at cost reduction is to identify those locations where costs are low and quality is at an acceptable level.

Details

Journal of Corporate Real Estate, vol. 6 no. 1
Type: Research Article
ISSN: 1463-001X

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Article
Publication date: 13 September 2011

Azmat Gani

This paper aims to investigate the effect of business environment indicators (time required to start a business, time required to register a property, time required to…

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2005

Abstract

Purpose

This paper aims to investigate the effect of business environment indicators (time required to start a business, time required to register a property, time required to enforce a contract, and time to resolve insolvency) on trade in a sample of four Gulf Co‐operation Council (GCC) countries: Kuwait, Oman, Saudi Arabia, and United Arab Emirates.

Design/methodology/approach

The methodology included in this paper is based on a regression analysis of annual data on trade and business environment indicators for the 2003‐2009 period. The data are pooled across the four countries. The empirical analysis uses the fixed effects estimation procedure as this is considered to be the most appropriate given the nature of the available data and sample countries.

Findings

The results obtained through fixed effects estimation provide strong evidence that the time required to start a business and time required to resolve insolvencies is negatively and statistically significantly correlated with imports. The findings also reveal that the time required registering a property, the time required to enforce a contract, and the time required to resolve insolvencies are negatively and statistically significantly correlated with exports. Other standard determinants of imports and exports are also confirmed.

Research limitations/implications

The major limitation is the absence of measures of business environment indicators for two of the six GCC countries (Bahrain and Qatar) where consistent measures were not available and these countries are eliminated from the empirical analysis.

Originality/value

These results lead to the conclusion that domestic business environment matters for trade in the GCC countries. There is a need for GCC countries to continuously reform their business environment so as to be integrated and stay competitive in this globalizing world.

Details

Journal of International Trade Law and Policy, vol. 10 no. 3
Type: Research Article
ISSN: 1477-0024

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Article
Publication date: 7 March 2018

Tirthankar Nag and Chanchal Chatterjee

Indian and Chinese businesses are slowly making advances in each other’s markets. The purpose of this study was to understand factors that influence the business

Abstract

Purpose

Indian and Chinese businesses are slowly making advances in each other’s markets. The purpose of this study was to understand factors that influence the business environment of a country and how does it compare between India and China.

Design/methodology/approach

The study uses firm-level survey data from the World Bank’s Enterprise Surveys. The study considered survey data for 2,700 Chinese firms and 9,281 Indian firms. Exploratory factor analysis and structural equation modeling were used to analyze the factors that drive the business environment in both countries and why differences appear.

Findings

The data set reveals different factor structures for India and China. Across both the countries, infrastructure support and governance play a major role in shaping the business landscape, though in the case of India, regulatory dynamics play a crucial role. The study concludes that these differences drive the basic difference in business environment across both countries.

Research limitations/implications

The study considers only the formal sector, and informal businesses have been left out because of paucity of data. The dynamics of informal business sector can be considered for future studies.

Practical implications

While making market entry or investment decisions globally, businesses can analyze country-specific environmental factors through this framework. As the study is based on the perceptions of businesses, policy-makers can also focus on these factors to attract businesses to specific countries or regions.

Originality/value

The study is an original research study. The study adds to the existing academic literature and is expected to help policy-makers and senior managers in focusing on specific aspects of business environment when developing policies or taking market entry decisions.

Details

Journal of Indian Business Research, vol. 10 no. 4
Type: Research Article
ISSN: 1755-4195

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Article
Publication date: 29 November 2018

Michael Wendelboe Hansen, Esther K. Ishengoma and Radha Upadhyaya

To understand African small and medium-sized enterprise (SME) performance and its antecedents is essential, both from a strategic management and an industrial development…

Abstract

Purpose

To understand African small and medium-sized enterprise (SME) performance and its antecedents is essential, both from a strategic management and an industrial development perspective. While a substantial literature on African SMEs has emerged in recent years, studies of their performance specifically are few and inconclusive. The purpose of this paper is to address this lacuna in the literature by examining variations in performance of 210 East African SMEs.

Design/methodology/approach

The paper employs OLS and logistic regression and Classify k-means test to analyze performance variations in a unique data set of 210 food processing enterprises in Tanzania, Kenya and Zambia.

Findings

Three generic types of African SMEs are identified based on performance: laggards, followers and gazelles. The gazelles are typically medium-sized, skill-intensive companies selling relatively differentiated products in niche markets. The laggards are typically small, capital-intensive companies involved in grain milling that adopt a cost differentiation strategy. A key driver of variation in performance is found to be the quality of the external business environment (in particular the quality of intermediary markets), and also capability factors such as the strength of management. Strategy factors such as differentiation and political strategies explain performance variations.

Practical implications

Among the policy implications are that African industrial policy should focus on improving the functioning of intermediary markets, e.g. by reducing the transaction costs of inter-firm collaboration. Moreover, rather than focusing industrial policy on SMEs per se, policymakers should focus on those types of enterprises that are capable of generating high performance, e.g. skill-intensive enterprises with strong managerial capabilities, engaged in differentiation strategies.

Originality/value

The paper integrates the extant literature on African SME performance, develops an analytical framework for studying it and presents novel empirical insights based on one of the most detailed surveys of SME performance in the continent to date. The findings have important and tangible implications for literature, as well as for industrial policy.

Details

International Journal of Emerging Markets, vol. 13 no. 6
Type: Research Article
ISSN: 1746-8809

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Book part
Publication date: 8 November 2019

Nina Bohdan and Veronika Garkavaya

This chapter discusses the positioning of Belarus in the international context of socioeconomic development based on an assessment of the country's dynamics in world…

Abstract

This chapter discusses the positioning of Belarus in the international context of socioeconomic development based on an assessment of the country's dynamics in world rankings. The country's presence in the recognized world rankings and its holding high positions in them is an obvious advantage for achieving a favorable investment image. Ratings characterize the country's comparative position at the international level in a number of areas: from credit capacity to human capital development.

There has been analyzed the position of the Republic of Belarus in several recognized international comparisons, such as Human Development Index, Doing Business, ICT Development Index, Global Innovation Index, Sustainable Development Goals Index, Corruption Perceptions Index, Rule of Law Index, Worldwide Governance Indicators, and others.

However, Belarus is not yet participating in the international competitiveness assessment through such popular international ratings as Global Competitiveness Index and Global Entrepreneurship Monitor. The research findings show that the strongest aspects of the socioeconomic development of Belarus are in place due to the high educational level of the human capital development, gender equality, and the implementation of the UN sustainable development goals. The analysis also shows that the weaknesses of institutional environment and public administration do not enable the full implementation of the planned goals of socioeconomic development.

Details

Modeling Economic Growth in Contemporary Belarus
Type: Book
ISBN: 978-1-83867-695-7

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Article
Publication date: 15 September 2020

Cláudia Beatriz Batschauer da Cruz, Dinorá Eliete Floriani and Mohamed Amal

This study aims to advance a sub-national perspective within the OLI Paradigm by analyzing how and to what extent the Eclectic Paradigm can serve as a general model to…

Abstract

Purpose

This study aims to advance a sub-national perspective within the OLI Paradigm by analyzing how and to what extent the Eclectic Paradigm can serve as a general model to capture region-specific aspects of the location determinants of FDI, encompassing institutional effects that extend beyond the quality of institutions.

Design/methodology/approach

The authors conducted a systematic literature review of 41 selected papers published between 1990 and 2019. Using inductive content analysis, they investigated the theoretical choices used to support analyses of the effects of institutional factors on MNEs' location decisions at the sub-national level.

Findings

It was found that, when changing from the national to the sub-national level of analysis, there is no need to change the main assumptions used in the literature, although a different perspective must be adopted. The Eclectic Paradigm permeates most of the studies revised and can serve as a general model to capture the sub-national perspective. It offers a foundation for new perspectives on the dynamics of institutional and political factors and their effects on location strategies and determinants at the sub-national level. Adopting the OLI Paradigm with a sub-national approach could widen the IB literature's prevailing focus on traditional economic factors and institutional quality.

Research limitations/implications

The authors contribute to extant International Business literature Their paper enhances the literature on FDI location determinants by providing a more specific approach to development of a sub-national perspective within the OLI Paradigm, extending the institutional effects to capture more region-specific factors influencing the location of FDI. Study limitations are related to our analytical focus on the location dimension, excluding motives for FDI or firm-level location strategies. Rather than limiting analysis to quantitative studies, future research that includes qualitative studies and also covers the other dimensions of the OLI Paradigm could open additional new research avenues for advancing the sub-national perspective within the field of IB.

Practical implications

The authors’ main findings suggest that MNEs' location strategies should include a sub-national perspective, which means that firms need to assess different levels of the location and understand their interaction with nationwide constraints and limitations, as it may affect firms' ability to effectively conduct their value-adding activities. They also contribute elements that can support sub-national governments' actions and policies aiming to enhance locational advantages to attract and retain FDI.

Originality/value

This review specifically analyzes the location determinants of FDI at the sub-national level, in studies published in a broad set of journals, from a variety of fields, prioritizing articles that investigate sub-national institutional determinants. The authors derive implications for the International Business literature and propose that the sub-national dimension should be incorporated into the Eclectic paradigm in order to better understand the influence of institutional sub-national determinants.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 4 September 2007

Art Kovačič

This paper aims to evaluate Slovenian competitiveness by quantitative and by qualitative methods, and tries to explain why some countries develop faster than others.

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6372

Abstract

Purpose

This paper aims to evaluate Slovenian competitiveness by quantitative and by qualitative methods, and tries to explain why some countries develop faster than others.

Design/methodology/approach

By observing other economies, it is possible to learn how to improve the development base at home. Many indicators of national competitiveness have been suggested. Broadly speaking, competitiveness can be measured with some indicators: terms of trade, current account balance, per capital income, productivity growth, high‐tech export (percent), expenditure on R&D and openness of economy. In addition, the systematic competitiveness by International Institute of Management Development of World Economic Forum methodology can be measured. Questionnaire indicators give us a more qualitative view on competitiveness. The modern way of measuring national competitiveness is using questionnaires, which allows evaluation of the dynamic evolution of one economy, the qualitative competitiveness and the expectations of the business managers. Managers often evaluate the quality of business environment in which they operate. They also try to forecast the economic situation of the country in the near future. Therefore, the combination of statistical data and indicators from questionnaires is the best way to measure national competitiveness.

Findings

Countries with different infrastructures and economic‐policy measures are indirectly competing to attract the investments of multinational companies, or, what is most interesting, profit‐making industries. For small open economy like Slovenia, internationalization at all levels is essential for long‐term economic growth.

Research limitations/implications

Slovenian enterprises neglect certain non‐price factors of competitiveness that constitute the key element in modern competition. Exports by Slovenian enterprises are thus still concentrated on non‐differentiated products and services with lower value added but with an adequate level of quality.

Originality/value

The competitiveness concept is introducing the benchmarking method on the economy level. As it is sometimes impossible to find the best solutions by analyzing only the home country, it is more common to analyze problems of the other countries to find solutions for our own problems. After the EU integration process, it can be seen that the benchmarking process is strongly implemented on the analytical as on the policy level.

Details

Benchmarking: An International Journal, vol. 14 no. 5
Type: Research Article
ISSN: 1463-5771

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Article
Publication date: 1 December 2004

Troy A. Festervand

In this study of industrial recruitment and economic development, perceptual mapping was used to identify the collective and individual positions of ten competing…

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1591

Abstract

In this study of industrial recruitment and economic development, perceptual mapping was used to identify the collective and individual positions of ten competing south‐eastern cities. The perceived position of the “ideal” city also was captured by the study's findings. Industrial real estate executives who were surveyed indicated that some cities have positioned themselves strategically in terms of quality of life, whereas others are recognized because of their resources and markets or pro‐business environment. Some cities appear better able to take advantage of their position, whereas others face economic development obstacles.

Details

Journal of Business & Industrial Marketing, vol. 19 no. 7
Type: Research Article
ISSN: 0885-8624

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