| Studies benchmarking or indexing regional competitiveness are increasingly common in the popular and professional press. Indices are popular because they condense a large amount of data into a single number or grade that facilitates the easy comparison of regional economies. However, researchers question both the benchmarking methodology and the appropriateness of applying one region's successful economic development practices to a dissimilar region. The goal of this study is to improve the benchmarking methodology by identifying possible variable weights for three competitiveness outcomes (growth in population, employment, and per capita income) and exploring whether policy inputs (innovation inputs, knowledge workers, labor employability, and entrepreneurial environment) interact with a region's industrial structure and legacy (establishment age and churning, business size and competitiveness, industrial specialization, and relative industry wage) to affect competitiveness. Data describing the economic characteristics of 151 metropolitan statistical areas in the US South are used to estimate the competitiveness outcomes under two economic growth model specifications. The estimation results indicate that variable weights should differ across competitiveness outcomes and that the effect of policy inputs on competitiveness outcomes is influenced by the region's industrial structure and legacy. It is therefore difficult to construct meaningful indices, and researchers could assist policymakers by providing less aggregated data and more thorough explanations of how variables interact to influence competitiveness outcomes. |
