The Relationship between Competitiveness and Economic Growth: A Panel Data Analysis on Selected Countries

As economic growth is very important for the development of individuals and the society, the importance of capital stocks and labor force for the economic growth of countries cannot be neglected. Additionally, the human capital component and especially the role of competitiveness increases on the growth process have been extensively discussed over the last two decades. This paper examines the impact of competitiveness increases on economic growth of selected middle-income countries including Turkey for the period of 1997-2012 using a balanced panel data analysis, which was relatively less studied in the literature. According to analysis results, an increase on the competitiveness index of countries in the panel, which were obtained from the data set of the International Institute for Management Development (IMD), positively increases per capita income level. This result may be interpreted as several factors that increase competitiveness including infrastructure, economic structure, business world and regulations and investments that ensure public efficiency may have a positive impact on economic growth. Therefore, this study suggests that future policies that concentrate on extensive growth instead of intensive dimension may contribute to efficient and sustainable growth.