Measuring the International Structural Competitiveness and the Hierarchy of National Economies: The Case of the European Union

Abstract The determination of the level of competitiveness of national economies and the resulting hierarchy in the world economy is a central economic issue. Research on the subject has been mostly dominated by empirical, rather atheoretical, studies. In this paper, the determination of the international competitiveness level is achieved by using three criteria, which jointly define the level of international structural competitiveness: –the ratio of technologically advanced products in exports, the degree of economic diversification, and the level of the interconnectedness of the economy. The Technologically Advanced Domestic Valued Added in Exports condenses the above three criteria and it is proposed as a measure of international structural competitiveness. In addition, another measure of international structural competitiveness is being examined and tested: the Economic Complexity Index. The implementation of both measures in the European Union reveals similar results regarding the hierarchical position of the economies of the European Union member states, in terms of their international competitiveness.JEL classification: R15, C67, F15