Journal article

Measurement of Lithuanian Regions by Regional Competitiveness Index

Competition Lithuania
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The theoretical and practical aspects of the measurement of regional competitiveness by a composite index are analyzed in this article. While the concept of regional competitiveness is not formed yet at the academic level and the method of competitiveness measurement, which is grounded methodologically and accepted generally, is still missing, the competitiveness of a region can be measured in different ways: analyzing one or several factors of competitiveness, using theoretical models of competitiveness, creating composite indices, etc. Every method has its advantages and disadvantages. Each of them can be useful in the measurement of regional competitiveness, because they emphasize different aspects of the concept of competitiveness. The justification of identification of the factors of competitiveness and the test of results for robustness and sensitivity are requested for the transparency of each method. The summarized scheme of the measurement of regional competitiveness by regional competitiveness index (RCI) is presented in the article.

The measurement of regional competitiveness is based on the factors of competitiveness. To identify the factors of competitiveness, the following traditional models of competitiveness can be used as methodological foundations: the "National Diamond" model, "Double Diamond" model, "Nine factors" model, "Regional competitiveness hat" model, "Pyramid model of Regional Competitiveness", "Regional competitiveness tree" model. Every model distinguishes in different techniques of the selection and grouping the factors of competitiveness into a general system. It is important to find out the factors, which create the complex competitive advantage of the region, but not only positive presuppositions for its achievement. The main factors of regional competitiveness are presented in this article. In order to measure the competitiveness in quantitative dimension, the indicators of factors of regional competitiveness are also presented.

The regional competitiveness index can be constructed in various scenarios: by using and combining different techniques of the selection and weighting the factors, methods of data normalization, etc. Every technique has its advantages and disadvantages. Different techniques are possible for calculating the index, if the choice is methodologically based and the results are statistically justified. The stages and the main aspects on a sound methodology of the calculation of RCI are identified in this article.

Rapidly developing processes of globalization throw new challenges for the means of economic analysis and strategic planning. Different techniques can be used for analyzing and creating strategies for increasing the competitiveness of the region. Each of them has its advantages and disadvantages. In order to find out the strengths and weaknesses of the measurement of competitiveness by RCI, the new created index was empirically tested on the basis of the data of 10 Lithuanian districts during the period of 2001-2007. The results of the measurement and advantages and disadvantages of the use of RCI are presented in the article.

The new created RCI, presented in the article, is one of the ambitions for having a convenient tool, which can be used in the economic analysis, strategic planning and justification of solutions for the increase of competitiveness of a region.

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