The Impact of the Economic Complexity Index on Competitiveness: A Study of Selected Emerging Countries

The main purpose of this study is to investigate the relationship between economic complexity and competitiveness using panel data in a sample of 39 emerging countries from 2002 to 2018. The results of the causality test of Dmitresco and Horlin Granger (2012) show a two-way cause between economic complexity and competitiveness. This indicates that the higher complexity of the economy helps countries to improve their average level of competitiveness, and vice versa. At the same time, the results of the model estimation using the system generalized method of moments (GMM) estimators confirm that economic complexity is a determining factor in the competitiveness of countries. This shows that economic integration with the creation of new sectors and new products creates significant opportunities for new jobs, which in turn leads to greater competition and a more dynamic environment. At the same time, the impact of variables on GDP growth, good governance, real exchange rates, human capital, and R&D costs on the competition of countries is also positive. Therefore, in order to increase competitiveness and develop a knowledge-based economy, emerging countries need to consider policies to increase economic complexity along with other factors affecting competitiveness.