Unveiling the Drivers of Competitiveness: A Study Across Latin America and Europe

Abstract

The measurement of competitiveness requires the consideration of factors specific to a region or country. This article addresses the identification of a basic set of factors that, in comparison with European countries, impact the competitiveness of Latin American countries. A retrospective nonexperimental design was carried out by conducting non‐parametric correlation analysis, testing subsequently with multiple linear regression analysis, as well as structural equation analysis. Next, different predictive models were considered, and the four main variables explaining competitiveness in Europe and Latin America were identified from the Global Competitiveness Report. The selected independent variables were: incidence of corruption, buyers sophistication, pay‐productivity ratio, and investment in research and development. The analyzed models satisfactorily met the assumptions and showed an adequate fit. Two models are reported which synthesize relevant factors explaining the competitiveness of the analyzed countries, favoring a parsimonious approach to the explanation of this variable.