Social Indicators Research

, Volume 134, Issue 2, pp 747–770 | Cite as

A Non-radial DEA Index for Peruvian Regional Competitiveness

Article

Abstract

In this paper, we propose a method to measure competitiveness performance at the subnational level, with an application to Peruvian regions. For this, we propose a benefit-of-the-doubt composite index that summarizes the information of several indicators that characterize competitiveness. It is based on an optimization approach, using data enveloping analysis (DEA) techniques, so that each indicator is weighted in an endogenous way, and each unit is evaluated in the most favourable light. Our proposed index is a non-radial variant of the typical DEA scores, which avoids the traditional pitfalls of DEA-based composite indices, such as unreasonable weights. Additionally, we propose a meta-frontier approach in order to compare the competitiveness performances across different periods of evaluation. Our assessments of the Peruvian regions’ competitiveness performance improve on the results of traditional DEA methods, which award high marks to regions with very heterogeneous performance (i.e., regions with very high scores in some indicators, and very poor in others). Additionally, the comparison of the performance across time shows a general decrease in the average competitiveness between 2008 and 2014 of the Peruvian regions.

Keywords

Regional competitiveness Competitiveness index Competitiveness performance Economic growth Data envelopment analysis Meta-frontier 

JEL Classification

O47 H50 E6 

Notes

Acknowledgments

The authors would like to express their gratitude to Dr. Fernando A. D’Alessio Ipinza, Director General of CENTRUM Católica Graduate Business School, whose continuous support and encouragement made this research possible. Moreover, the authors are grateful to the Editor-in-Chief and three anonymous referees for their valuable comments and suggestions on the previous drafts of this article. The authors also would like to thank Premio PODER Magazine for awarding the title of the best research award for the 2013 Think Tank of the Year in the category of Peru’s Most Innovative Study.

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Copyright information

© Springer Science+Business Media Dordrecht 2016

Authors and Affiliations

  1. 1.CENTRUM Católica Graduate Business SchoolPUCPLimaPeru

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