Jan 15 2018

The Linkage Between Nation Branding And Nation Competitiveness

By George J. Avlonitis

Within the contemporary international competitive environment, nations are constantly required to respond to a dynamic social and economic framework, similar to a commercial marketplace . Concurrently, nations compete with each other for resources and alliances that could establish and enhance their competitive advantage. Nation branding is considered a major tool for the creation and leverage of competitive advantages of nations and consequently for their sustainable development.

This article discusses the results of a study which attempted to explore the relationship between nation branding and nation competitiveness in the global environment, using secondary data.

In this study, we adopt the construct of nation branding equity which could be thought of as a measurable and visible outcome of the process that can be approached through objective data and can reveal many aspects of the nation branding  phenomenon. For the present study nation brand equity is defined as follows:

Nation brand equity is the conspicuous profile of a country that is shaped by the country’s prevailing brand aspects.

The country’s prevailing brand aspects correspond to the nation brand dimensions that emerged through the literature review and include : Economy (Exports, Tourism, Science and Technology, Foreign Direct Investment), Nature (Environment), Culture, Governance (Government policy) and Brand Ambassadors (Media, Diaspora)

The nation’s competitiveness is also shaped by many determinant dimensions, and as a result can be considered a multifaceted construct. Within this framework, many rankings are being published concerning nations’ competitiveness, with the rankings of World Economic Forum (WEF) and Institute for Management Development (IMD) considered as the most popular ones.

For the research purposes of the present study, secondary data were selected for all dimensions of nation brand equity using  several  indicators and  sources. Specifically: Exports per capita (World Bank),Nation Brand Perception Index ( East West Communications),Net Migration Rate (United Nations),FDI per capita (UN Conference on Trade and Development), Environmental Performance Index (EPI) (Yale University),Safeguarded Cultural Heritage (UNESCO),Inbound Tourism Expenditure per capita (UNWTO),SCImago Journal &Country Rank (SJR),Governance Index (World Bank). Nation Competitiveness is considered to be summarized in the Global Competitiveness Index (GCI), as it is annually being published by the World Economic Forum .

The population of the study  consisted  of 194 countries (the total number of countries that exist in the world today. The sample was formed following a purposive sampling process that was based on the following  criteria:

(a) Availability of secondary data for all variables being studied.
(b) Representativeness of sample (both in geographical and economic terms)

According to these criteria, data sets of several sources were combined, in an attempt to achieve inclusion of the maximum number of countries. The resulting database consists of secondary data for 80 countries,  from the five continents, for a four-year period (2008-2011).

Drawing from the findings of the research, the multidimensionality and complexity of the Nation Brand Equity construct that arose through the literature review was also obvious in the empirical results. Despite the fact that the various aspects of the construct did not display unidimensionality, they behaved as a total in their relationships with Nation Competitiveness. Also, the link between Nation Brand Equity and Nation Competitiveness (as measured with GCI) emerged in all time periods (years), suggesting a stable and consistent relationship between the two constructs.

Furthermore, Governance emerged as a key variable in the Nation Brand Equity construct and could consist a focal point for the Nation Brand Equity and the Nation Competitiveness of a country, as it can either transform country specific resources to a globally sustainable national competitive advantage or mismanage them, resulting to a low Nation Brand Equity.

The main practical implications of the present study refer to the policies of the state. It is clear that nation branding connects to the competitiveness of a country at a global level and could be used as a strategic planning tool by any government that wishes to maintain or improve its country’s international competitive position.

Putting nation branding into action assumes an extrovert -oriented governmental policy that would trace all actions around the axis of global competitiveness, exploiting all positive characteristics of the country aiming to improve all weaknesses and transparently communicating  progress to both internal and external audiences.

By George J. Avlonitis, Professor of Marketing at the Athens University of Economics and Business 

A research seminar on the same topic was organised at the HO. For more details about the event, please visit the event page.

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