Competitive Efficiency in Catalonia: A non-parametric study of the Competitiveness Index based on Data Envelopment Analysis

Abstract

Building on the Resource Based View (RBV) theory of the firm, this study proposes an analysis of business competitiveness and competitive efficiency based on the configuration of different competitive pillars that shape competitiveness. The empirical application uses non-parametric frontier methods (Data Envelopment Analysis, DEA) on a unique sample of 171 Catalan businesses.The results show that different strategies adopted by businesses impact their competitiveness level. Also, it was found that competitive efficiency is conditioned by the heterogeneous configuration of competitive pillars, and that this effect varies across industries, in our case manufacturing, construction, retail, knowledge-intensive business services (KIBS), and consumer services. The findings at industry level reveal that competitiveness and competitive efficiency are two inter-connected construct that not always follow the same trajectory.Additionally, the findings indicate that the optimal configurations of competitive pillars (measured via the weights assigned to competitive pillars) are heterogeneous across industries, which suggests that competitive strengths and weaknesses also vary across industries. For example, ‘innovation’ and ‘human capital’ are the most relevant competitive pillars among KIBS firms, while for retail firms the pillars related to ‘markets’ and ‘human capital’ are more decisive to shape competitiveness.