Competitiveness and FDI: An Econometric Analysis

This paper examines the econometric relationship between competitiveness and FDI, GDP, or trade. Using the World Economic Forum’s (WEF) Global Competitiveness Index (GCI), I demonstrate that there is a strong, positive relationship between competitiveness and FDI from the U.S. Using the sub-measures of competitiveness within the GCI, I also demonstrate that there are significant gains to be made by a country adopting policies that make domestic markets more competitive.