Regional development and competitiveness : An analysis of indices of regional competitiveness

There is a growing debate on the theoretical basis, how it could be conceptualised, as well as the utility and meaning of regional competitiveness. This is associated with various attempts to measure regional competitiveness with the help of composite indices for coming-up with league tables. However the measurement of regional performance has run ahead of the academic debate, such indices receive a lot of media attention, and in some cases are even used by policy-makers to support their arguments. It is therefore instructive to look at such indices in more detail to evaluate their utility from a practical standpoint. This is done by working out the theoretical framework for six indices, deconstructing these and analysing the single indicators. Methodologically, issues such as normalization, standardization and the aggregation into a single number are also included. In addition to this, since many authors claim that their indices can function as a proxy for future growth, a statistical analysis of the predictive quality with respect to economic performance has also been carried out. This thesis, therefore, for the first time, sheds light on the utility of regional competitiveness indices and contributes to the discussion of the meaning of benchmarking regional performance based on the regional competitiveness hegemony that can be observed. The findings suggest that indices of regional competitiveness can be of only limited help for policy-decisions besides although they are a source for a wealth of information on certain regional indicators. This is primarily because of the lack of a theoretical basis for measuring regional competitiveness, and secondly because of the poor performance in functioning as a proxy for future economic performance