—The paper deals with economic freedom and its effect on national competitiveness. There are two goals examined within the paper. At first, I examine if economic freedom causes national competitiveness by means of the Granger causality test. Secondly, the effect of economic freedom on national competitiveness is tested using panel data for the period 2004-2011. Three groups of countries were selected: economic free, Visegrad four and repressed countries. Economic freedom and national competitiveness are quantified by comprehensive indicators: Index of economic freedom and Global competitiveness index. The results suggest that economic freedom causes national competitiveness in countries with higher degree of economic freedom. Positive effect on national competitiveness was found out.
—Economic freedom, economic growth, economic recession, Granger causality, national competitiveness, panel data model.
Tomas Verner is with the Department of Economics, Silesian University in Opava, School of Business Administration in Karvina, Univerzitni nam. 1934/3, 73340, Karvina, Czech Republic (e-mail: email@example.com).
Cite: Tomas Verner, "The Effect of Economic Freedom on National Competitiveness: Causality from a Panel of Countries," Journal of Economics, Business and Management vol. 3, no. 1, pp. 150-155, 2015.