The Executive Opinion Survey: The Voice of the Business Community

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1 CHAPTER.3 The Exeuive Opinion Survey: The Voie of he Business Communiy CIARA BROWE THIERRY GEIGER TAIA GUTKECHT World Eonomi Forum The Global Compeiiveness Repor oninues o be a highly respeed assessmen of naional ompeiiveness. To ondu his work, he World Eonomi Forum relies on a large se of daa soured from various inernaional organizaions and from is own annual Exeuive Opinion Survey (he Survey). The Survey, adminisered eah year in over 40 eonomies, apures valuable informaion on a broad range of faors ha are riial for a ounry s ompeiiveness and susainable developmen, and for whih daa soures are sare or, frequenly, nonexisen on a global sale. Among several examples of oherwiseunavailable daa are he qualiy of he eduaional sysem, indiaors measuring business sophisiaion, and labor marke variables suh as flexibiliy in wage deerminaion. The Survey resuls are used in he alulaion of he Global Compeiiveness Index (GCI) and oher Forum indexes, inluding he eworked Readiness Index, he Enabling Trade Index, he Travel & Tourism Compeiiveness Index, he Finanial Developmen Index, and he Gender Gap Index, as well as in regional sudies. A ruly unique soure of informaion, he Survey daa have also long served a number of inernaional and naional organizaions, governmen bodies, and aademia as well as he privae seor o inform poliy work, sraegies, and invesmen deisions. For example, Transpareny Inernaional uses he Survey daa for he elaboraion of heir Corrupion Perepions Index and he Bribe Payers Index. Insiuions suh as he Organisaion for Eonomi Co-operaion and Developmen, he World Bank, and he Inernaional Moneary Fund also refer o hese daa in heir publiaions, as do a number of aademi publiaions. Finally, an inreasing number of naional ompeiiveness repors also draw on or refer o he Survey daa. The SURVEy I UMBERS The World Eonomi Forum has ondued is annual Survey for over 30 years, making i he longes-running and mos exensive survey of is kind. This year s Survey apured he opinions of over 3,000 business leaders in 48 eonomies beween January and May 03. Following he daa-ediing proess (see below), a oal of 3,638 surveys were reained for 44 ounries. This represens an average of 94.7 respondens per ounry, while he median ounry sample size is 85.5 responses. Given he exen of he Survey s ounry overage and in order o maximize is oureah, i is available in 4 languages. 3 Geographi expansion Sine he firs ediion of he World Eonomi Forum repor on ompeiiveness in 979, ounry overage has expanded from 6 European ounries o 48 eonomies worldwide for his ediion, ogeher aouning for over The Global Compeiiveness Repor World Eonomi Forum

2 .3: The Exeuive Opinion Survey Figure : Counry/eonomy overage of he Exeuive Opinion Survey 03 n Previous overage n 03 addiions Box : Example of a ypial Survey quesion In your ounry, how srong is he proeion of inelleual propery, inluding ani-ounerfeiing measures? Exremely weak < > Exremely srong Cirling... means you agree ompleely wih he answer on he lef-hand side Cirling... means you largely agree wih he lefhand side Cirling 3... means you somewha agree wih he lefhand side Cirling 4... means your opinion is indifferen beween he wo answers Cirling 5... means you somewha agree wih he righhand side Cirling 6... means you largely agree wih he righ-hand side Cirling 7... means you agree ompleely wih he answer on he righ-hand side 99 peren of he world s gross domesi produ (GDP; see Figure ). In he 03 ediion, hree addiional eonomies are inluded: Bhuan, Lao PDR, and Myanmar. Furhermore, Angola and Tunisia have been reinsaed following a year of non-inlusion. Tajikisan and Syria, however, are no inluded in his year s ediion owing o he inabiliy o ondu a survey in hese wo ounries. 4 The Forum s Global Compeiiveness and Benhmarking ework oninues is effors o inrease ounry overage year on year. SURVEy STRUCTURE, ADMIISTRATIO, and METHODOLOGy The Survey is divided ino 4 seions: I. Abou Your Company II. Overall Perepions of Your Eonomy III. Infrasruure IV. Innovaion and Tehnology Infrasruure V. Finanial Environmen VI. Foreign Trade and Invesmen VII. Domesi Compeiion VIII. Company Operaions and Sraegy IX. Governmen and Publi Insiuions X. Eduaion and Human Capial XI. Corrupion, Ehis and Soial Responsibiliy XII. Travel & Tourism XIII. Environmen XIV. Healh Mos quesions in he Survey ask respondens o evaluae, on a sale of o 7, one pariular aspe of heir operaing environmen. A one end of he sale, 84 The Global Compeiiveness Repor World Eonomi Forum

3 .3: The Exeuive Opinion Survey represens he wors possible siuaion; a he oher end of he sale, 7 represens he bes (see Box for an example). The adminisraion of he Survey ould no be arried ou wihou he nework of over 60 Parner Insiues worldwide. Parner Insiues are reognized researh or aademi insiues, business organizaions, naional ompeiiveness ounils, or oher renowned professional eniies and, in some ases, survey onsulanies (for he full lis, see he Parner Insiues seion a he beginning of he Repor). 5 They are seleed on he basis of heir apaiy o reah ou o he business ommuniy, heir repuaion, and heir ommimen o he issue of ompeiiveness. In adminisering he Survey, Parner Insiues are asked o follow deailed sampling guidelines o ensure ha he sample of respondens is he mos represenaive and omparable aross he globe and in a speifi imeframe. The sampling guidelines have evolved over ime and are based on bes praies in he field of survey adminisraion and on disussion wih survey expers. The Survey sampling guidelines speify ha he Parner Insiue should build a sample frame ha is, a lis of poenial business exeuives from smalland medium-sized enerprises and large ompanies from he various seors of aiviy as saed below. I hen applies a dual sraifiaion proedure based on hese wo rieria of ompany size and seor. More speifially, he Parner Insiues are asked o arry ou he following seps:. Prepare a sample frame, or large lis of poenial respondens, whih inludes firms represening he main seors of he eonomy (agriulure, manufauring indusry, non-manufauring indusry, and servies).. Separae he frame ino wo liss: one ha inludes only large firms, and a seond lis ha inludes all oher firms (boh liss represening he various eonomi seors) Based on hese liss, and in view of reduing survey bias, hoose a random seleion of hese firms from boh liss o reeive he Survey. Furhermore, he sampling guidelines speify ha he Parner Insiue should aim o olle a ombinaion of random respondens wih some repea respondens for furher omparaive analysis. 7 Parner Insiues are asked o olle beween 80 and 00 surveys, alhough generally aeped praie in sampling as well as reommendaions reeived from Gallup has led o a u-off of a minimum of 30 surveys per ounry. We are working losely wih he Parner Insiues o inrease he sample size for ounries ha have olleed a number of surveys jus above he u-off. The adminisraion of he Survey may ake a variey of formas, inluding faeo-fae inerviews wih business exeuives and mailed or elephone inerviews, wih an online survey opion as an alernaive. For energy, ime, and os onsideraions, he Forum enourages he use of he online survey ool, whih was available his year in 0 languages. The share of online pariipaion has signifianly inreased over he years and has now reahed almos 40 peren of all responses, up by 0 peren in jus wo years. This year, he Survey was adminisered enirely via he online ool in 9 eonomies (Argenina, Barbados, Belgium, Bolivia, he Czeh Republi, El Salvador, Esonia, Finland, Georgia, Ieland, Iran, Ireland, Israel, Lavia, Mala, orway, Puero Rio, Swizerland, and Venezuela), while he use of he online ool exeeded 90 peren in 8 furher eonomies (see Table ). The Parner Insiues also ake an aive and essenial role in disseminaing he findings of The Global Compeiiveness Repor and oher repors published by The Global Compeiiveness and Benhmarking ework by holding press evens and workshops o highligh he resuls a he naional level o he business ommuniy, he publi seor, and oher sakeholders. Following an iniial exernal audi by a eam of survey expers from Gallup in 008, a seond review was ondued by Gallup in 0, during whih he Survey insrumen, he sampling guidelines, and he adminisraion proess underwen a horough inspeion. Afer five years of implemening he reommendaions from he firs audi, i was ime o ake a furher wofold approah by analyzing he reommendaions and heir impa on he proess as well as keeping up o dae on bes praies in he field of surveying. Overall, he ouome of he review regarding he implemenaion of he 008 reommendaions was ommended. The audi deermined ha he Exeuive Opinion Survey proess follows bes praies and has made he reommended improvemens o he Survey ool and ranslaions, as well as o he sampling qualiy. The 0 audi addressed an imporan aspe relaed o he impa of naional ulure he so-alled ulural bias ha may impa inerviewee responses. The Global Compeiiveness and Benhmarking ework reognizes his as a possibiliy; noneheless, following inernaional bes praies and upon Gallup s reommendaion, i was deided no o re-weigh he daa using anhoring mehanisms beause of he limied effeiveness of suh a proedure and o preven adding furher noise o he daa. However, and as a sep o follow bes praies o help minimize possible language-based biases found in daa olleed via a single language survey, he number of languages for he Exeuive Opinion Survey is ever inreasing, reahing 4 for his ediion. The Global Compeiiveness Repor World Eonomi Forum

4 .3: The Exeuive Opinion Survey Table : Exeuive Opinion Survey: Desripive saisis and weighings Firs omponen* Seond omponen: 03 ediion* Counry/Eonomy Survey ediion o. of respondens Weigh (%)* o. of respondens Online (%) Weigh (%)* Albania Algeria Angola Argenina Armenia Ausralia Ausria Azerbaijan Bahrain Bangladesh Barbados Belgium Benin Bhuan Bolivia Bosnia and Herzegovina Boswana Brazil Brunei Darussalam Bulgaria Burkina Faso Burundi Cambodia Cameroon Canada Cape Verde Chad Chile China Colombia Cosa Ria Côe d'ivoire Croaia Cyprus Czeh Republi Denmark Dominian Republi Euador Egyp El Salvador Esonia Ehiopia Finland Frane Gabon Gambia, The Georgia Germany Ghana Greee Guaemala Guinea Guyana Haii Honduras Hong Kong SAR Hungary Ieland India Indonesia Iran, Islami Rep Ireland Israel Ialy Jamaia Japan Jordan Kazakhsan Kenya Korea, Rep Kuwai Kyrgyz Republi Lao PDR Lavia Lebanon (Con d.) 86 The Global Compeiiveness Repor World Eonomi Forum

5 .3: The Exeuive Opinion Survey Table : Exeuive Opinion Survey: Desripive saisis and weighings (on d.) Firs omponen* Seond omponen: 03 ediion* Counry/Eonomy Survey ediion o. of respondens Weigh (%)* o. of respondens Online (%) Weigh (%)* Lesoho Liberia Libya Lihuania Luxembourg Maedonia, FYR Madagasar Malawi Malaysia Mali Mala Mauriania Mauriius Mexio Moldova Mongolia Monenegro Moroo Mozambique Myanmar amibia epal eherlands ew Zealand iaragua igeria orway Oman Pakisan Panama Paraguay Peru Philippines Poland Porugal Puero Rio Qaar Romania Russian Federaion Rwanda Saudi Arabia Senegal Serbia Seyhelles Sierra Leone Singapore Slovak Republi Slovenia Souh Afria Spain Sri Lanka Suriname Swaziland Sweden Swizerland Taiwan, China Tanzania Thailand Timor-Lese Trinidad and Tobago Tunisia Turkey Uganda Ukraine Unied Arab Emiraes Unied Kingdom Unied Saes Uruguay Venezuela Vienam Yemen Zambia Zimbabwe Grand oal/average 3, oe: All saisis were ompued following he ediing proess. See ex for deails. * The able repors he informaion abou he wo Survey ediions used in he ompuaion of he wo-year weighed average sore. See Box for explanaion. For hese ounries, we are working losely wih Parner Insiues o inrease he sample size. Survey ediion(s) used for he ompuaion of ounry sores are as follows: 0 and 03; 0; 03. See Box for deails abou exepions. The Global Compeiiveness Repor World Eonomi Forum

6 .3: The Exeuive Opinion Survey Wih he aim of oninually improving he Survey ool and proesses, and following exper reommendaions, he Survey was made shorer and he erminology simplified. An Exeuive Opinion Survey adminisraion manual is also being developed for he Parner Insiues. Wih suh ongoing effors in he realm of survey adminisraion bes praie, The Global Compeiiveness and Benhmarking ework eam oninues o improve proesses o ahieve greaer daa qualiy and heighened omparabiliy aross eonomies. DATA TREATMET AD SCORE COMPUTATIO This seion deails he proess whereby individual responses are edied and aggregaed in order o produe he sores of eah eonomy on eah individual quesion of he Survey. These resuls, ogeher wih oher indiaors obained from oher soures, feed ino he GCI and oher projes. 8 Daa ediing Prior o aggregaion, he responden-level daa are subjeed o a areful ediing proess. The firs ediing rule onsiss of exluding hose surveys wih a ompleion rae inferior o 50 peren. 9 This is beause a parially ompleed survey probably demonsraes a lak of suffiien fous on he par of he responden. In a seond sep, a mulivariae oulier analysis is applied o he daa using he Mahalanobis disane ehnique. This es assesses wheher eah individual survey is represenaive, given he overall sample of survey responses in he speifi ounry, and allows for he deleion of lear ouliers. More speifially, he Mahalonobis disane es esimaes he likelihood ha one pariular poin of dimensions belongs o a se of suh poins. One single survey made up of answers an be viewed as he poin of dimensions, while a pariular ounry sample is he se of poins. The Mahalanobis disane is used o ompue he probabiliy ha any survey i does no belong o he sample. If he probabiliy is high enough we use 99.9 peren as he hreshold we onlude ha he survey is a lear oulier and does no belong o he sample. The implemenaion of his es requires ha he number of responses in a ounry be greaer han he number of answers,, used in he es. The es uses 65 quesions, seleed by heir relevane and plaemen in he Survey insrumen. A univariae oulier es is hen applied a he ounry level for eah quesion of eah survey. We use he sandardized sore or z-sore mehod, whih indiaes by how many sandard deviaions any one individual answer deviaes from he mean of he ounry sample. Individual answers wih a sandardized sore Z i,q, greaer han 3 are dropped. Daa weighing: Seor-weighed ounry averages One he daa have been edied, individual answers are aggregaed a he ounry level. We ompue seor-weighed ounry averages o obain a more represenaive average ha akes ino aoun he sruure of a ounry s eonomy. The sruure is defined by he esimaed onribuions o a ounry s GDP of eah of he four main eonomi seors: agriulure, manufauring indusry, non-manufauring indusry, and servies (see Table ). 0 An addiional sep is aken o preven individual responses wihin a sample from reeiving exessive weigh when he sruure of he sample and he underlying eonomy differ grealy. As an exreme example, imagine he ase of a ounry where jus 3 peren of responses ome from he servies seor, bu ha seor aually represens 90 peren of he ounry s eonomy. By applying he above seorweighing sheme, we would be giving a very high weigh o a very few surveys. This is avoided by rimming he seor weighs. When, for a pariular ounry, he raio of he weigh of one seor in he eonomy o he perenage of surveys from ha seor in he ounry sample exeeds 5, he seor weigh used for he weighed average is apped o five imes he perenage of surveys from ha seor in he sample. The weighs of he oher seors are hen adjused proporionally o heir weigh in he ounry s GDP. Formally, he seor-weighed average of a Survey S indiaor i for ounry, denoed q i, =, is ompued w s, q i,s,as s follows: S s, q q i,j,s, i, = S w s, q i,s, s q i,s, = q i, = w s, q i,s, s j s, wih s, q i,j,s, q i,s, = s, q q i,s, = i,j,s, s,, j j s, where w s, is seor s s onribuion o he eonomy of ounry ; q i,s, is he mean of he answers o quesion i from seor s in ounry ; q i,j,s, is he answer o quesion i from responden j in seor s in ounry ; and s, is he number of responses from seor s in ounry. When, for a given ounry, he sample size is oo small or he seoral represenaion of he sample is oo differen from he aual sruure in he eonomy, he mehanism desribed above migh no be suffiien o preven an individual response from reeiving a disproporionae weigh. In suh a ase he eonomi seor sraifiaion average is abandoned and a simple average of he surveys is applied, where all individual responses onribue equally o he ounry sore 88 The Global Compeiiveness Repor World Eonomi Forum

7 .3: The Exeuive Opinion Survey Table : Seoral value-added as a share (%) of GDP, mos reen year available Counry/Eonomy Agriulure Manufauring indusry onmanufauring indusry Servies Albania 0 9* 6 Algeria Angola Argenina Armenia 7 4 Ausralia Ausria Azerbaijan Bahrain Bangladesh Barbados Belgium Benin Bhuan Bolivia 3 54 Bosnia and Herzegovina Boswana Brazil Brunei Darussalam 55 3 Bulgaria Burkina Faso Burundi Cambodia Cameroon Canada 0 66 Cape Verde Chad Chile China Colombia Cosa Ria Côe d'ivoire Croaia Cyprus 8 78 Czeh Republi Denmark 0 77 Dominian Republi Euador Egyp El Salvador Esonia Ehiopia Finland Frane 8 79 Gabon Gambia, The Georgia Germany 7 7 Ghana Greee Guaemala Guinea Guyana Haii Honduras Hong Kong SAR Hungary Ieland India Indonesia Iran, Islami Rep Ireland Israel Ialy Jamaia Japan Jordan Kazakhsan Kenya Korea, Rep Kuwai Kyrgyz Republi Lao PDR Lavia Counry/Eonomy Agriulure Manufauring indusry onmanufauring indusry Servies Lebanon Lesoho 8 59 Liberia 77 5* 8 Libya Lihuania Luxembourg Maedonia, FYR Madagasar Malawi Malaysia Mali Mala Mauriania Mauriius Mexio Moldova Mongolia Monenegro Moroo Mozambique Myanmar amibia epal eherlands 3 74 ew Zealand iaragua 0 47 igeria orway Oman Pakisan 5 53 Panama Paraguay 8 59 Peru Philippines Poland Porugal Puero Rio Qaar Romania Russian Federaion Rwanda Saudi Arabia Senegal Serbia Seyhelles 7 80 Sierra Leone Singapore Slovak Republi Slovenia 66 Souh Afria Spain Sri Lanka Suriname Swaziland Sweden Swizerland Taiwan, China Tanzania Thailand Timor-Lese Trinidad and Tobago Tunisia Turkey Uganda Ukraine Unied Arab Emiraes Unied Kingdom 0 78 Unied Saes Uruguay Venezuela Vienam Yemen Zambia Zimbabwe 3 64 Soures: World Bank, World Developmen Indiaors (aessed Deember, 0); Eonomis Inelligene Uni, CounryDaa daabase (aessed Deember 3, 0); US Cenral Inelligene Ageny, The World Fabook (aessed Deember 3, 0) * Combined share of manufauring and non-manufauring seors. Figures were olleed in Deember 0 used for he ompuaion of he 0 Survey resuls. The Global Compeiiveness Repor World Eonomi Forum

8 .3: The Exeuive Opinion Survey Box : Counry sore alulaion q i, This box presens he mehod applied o ompue he ounry sores in The Global Compeiiveness Repor For any given Survey quesion i, ounry s final sore, where 0 3 q i, 0 3 q i, 0 q i, 03, is given by: q i, w w q i, w q i, q i, () q 0 i,n, q i, n= q i,n, () 0 w 0 is ounry s sore on quesion i in year, wih = 0, 03, as ompued following he approah desribed in he ex; 03 The weighs for eah year are deermined q i, as follows: where q i, 0 w q i, q i, 03 q i, 0 0 q 0 q i, i, 03 q i, q i, q i,n, q i,n, w 03 q i, is responden n s response (on a 7 sale) o quesion i in year ; and q w 03 i, q i, w 03 0 w 0 q w i,n, is he weigh applied o ounry s sore in year (see below). w w 0 0 w q 0 q i, w q i, w q i, q i, q i, i, w q i, () q q 03 i, i, () q i, 0 03 q i, q i, 0 03 w 0 (a) and w 03 q 0 disouned-pas (b) i,n, n= weighed average q i,n, q sample-size weighed average i, () 0 03 w 0 is he sample size (i.e., he number of respondens) for ounry in year, wih = 0, 03. Plugging w 03 Equaions (a) and (b) ino () and rearranging yields: q i, q () i, q q i, q i, i, 0 03 w 03 0 w 03 0 w 0 03 q i, q () i, q q i, q. (3) 0 03 i, i, 0 w 0 0 w disouned-pas weighed average 005 q i, q () 006 sample-size weighed average q q i, 03 i, i, q i, In Equaion q 0 (3), he firs i, () omponen q of he 03 i, weighing q sheme is he disouned-pas i, 0 03 q weighed i, 0 03 q average. The seond omponen i, is he sample size-weighed average. The wo omponens are given half-weigh eah. The value for a is 0.6, whih orresponds o a disoun disouned-pas faor of weighed /3. Tha average is, he 0 sore of ounry sample-size weighed is given 3.57 average/3 of he weigh given o he sore. One addiional haraerisi of his approah is ha i prevens a ounry sample ha is muh larger in one year from 0 03 overwhelming he smaller sample from he oher year. The formula is easily generalized. For any wo q i, () q i, onseuive ediions and of he Survey, ounry s final sore on q quesion i is ompued q i, q i, i, as follows: lower bound = Q.5 IQR q i, q () i, upper q bound = Q3.5 IQR 005 q i, q () q q i, i, i, q i, i, q i, q i,. (4) q i, 03 Exepions As desribed in he ex, here are a number of exepions o he approah desribed above. In desribing hem below, we use aual years raher han leers in equaions for he sake of onreeness. In he ase of Survey quesions ha were inrodued in 03, where, by definiion, no pas daa exis, he weigh applied is w = 0 and w =. Equaion () simply is q i, = q 03 i,. The same is rue for hose ounries ha are newly overed 0 3 (Bhuan, Lao PDF, and Myanmar) and reinsaed (Angola and Tunisia) in 03. For hese ounries oo we use q lower bound = Q.5 IQR i, = q 03 i, In he ase of ounries ha failed he iner-year robusness hek, he weigh applied is w upper bound = Q3.5 IQR = and w = 0, so ha 0 3 Equaion () simply beomes q i, = q 0 i,. In he ase of ounries ha failed he iner-year robusness hek las year and for whih he 0 daa were disarded, we use he Survey daa from 0 insead, and ombine hem wih hose of 03 o 0, ompue he sores. Equaion () hen beomes q i, = w 3 q i, w 3 q 03 i,. 006 Example For his example, we ompue he sore of Panama for indiaor 7.03 Hiring and firing praies, whih is derived from he following Survey quesion: In your ounry, how would you haraerize he hiring and firing of workers? [ = heavily impeded by regulaions; 7 = exremely flexible]. This quesion is no a new quesion, and Panama did no fail he iner-year robusness es eiher his year or las year. Therefore, he general ase of Equaion () applies. Panama s sore was 3.57 in 0 and 3.8 in 03. The weighing sheme desribed above indiaes how he wo sores are ombined. In Panama, he size of he sample was 33 in 0 and 30 in 03. Using a = 0.6 and applying Equaions (a) and (b) yields weighs of 45.3 peren for 0 and 54.7 peren for 03 (see Table ). The final ounry sore for his quesion is given by Equaion (): (Con d.) 90 The Global Compeiiveness Repor World Eonomi Forum

9 q () i, q q i, q i, i, q i,.3: The Exeuive Opinion Survey 005 q () Box q i, i, q i, : Counry sore alulaion q i, (on d.) q i, This is he final sore used in he ompuaion of he GCI and repored in Table 7.03 (see page 490). Alhough numbers are rounded o wo deimal plaes in his example and o one deimal plae in he daa ables, exa figures are used in all alulaions. lower bound = Q.5 IQR upper bound = Q3.5 IQR regardless of he seor of aiviy of he respondens ompanies. In 03, his was he ase for seven ounries: Angola, Bahrain, El Salvador, Finland, Kuwai, Seyhelles, and Venezuela. Daa weighing: Moving average As a final sep, he seor-weighed ounry averages for 03 are ombined wih he 0 averages o produe he ounry sores ha are used for he ompuaion of he GCI and for oher projes. This moving average ehnique, inrodued in 008, onsiss of aking a weighed average of he mos reen year s Survey resuls ogeher wih a disouned average of he previous year. There are several reasons for doing his. Firs, i makes resuls less sensiive o he speifi poin in ime when he Survey is adminisered. Seond, i inreases he amoun of available informaion by providing a larger sample size. Addiionally, beause he Survey is arried ou during he firs quarer of he year, he average of he responses in he firs quarer of 0 and firs quarer of 03 beer aligns he Survey daa wih many of he daa indiaors from soures oher han he Survey, whih are ofen year-average daa. For newly inrodued quesions, for whih no ime series exiss, he final ounry sore orresponds o he ounry sore in 03. This year, his is he ase for indiaors 6.04 Effe of axaion on inenives o inves, 7.05 Effe of axaion on he inenive o work, 7.08 Counry apaiy o reain alen, and 7.09 Counry apaiy o ara alen, whih are derived from four Survey quesions inrodued in 03 o replae wo double-barreled quesions on he apaiy o ara and reain alen and on he effe of axaion on inenives o inves and work, respeively. To alulae he moving average, we use a weighing sheme omposed of wo overlapping elemens. On one hand, we wan o give eah response an equal weigh and, herefore, plae more weigh on he year wih he larger sample size. A he same ime, we would like o give more weigh o he mos reen responses beause hey onain more updaed informaion. Tha is, we also disoun he pas. Table repors he exa weighs used in he ompuaion of he sores of eah ounry, while Box deails he mehodology and provides a larifying example. Iner-year robusness es and rend analysis The wo ess desribed above address variabiliy issues among individual responses in a ounry. Ye hey were no designed o rak he evoluion of ounry sores aross ime. We herefore arry ou an analysis o assess he reliabiliy and onsiseny of he Survey daa over ime. As par of his analysis, we run an iner-quarile range es, or IQR es, o idenify large swings posiive and negaive in he ounry sores. More speifially, for eah ounry we ompue as he average differene in ounry sores aross all he Survey quesions. We hen ompue he iner-quarile range (i.e., he differene beween he 5h perenile and he 75h perenile), denoed iq, of he sample of 48 eonomies. Any value lying ouside he range bounded by he 5h perenile minus.5 imes iq and he 75h perenile plus.5 imes iq is idenified as a poenial oulier. Formally, we have: lower bound = Q.5 IQR upper bound = Q3.5 IQR where Q and Q3 orrespond o he 5h and 75h pereniles of he sample, respeively, and IQR is he differene beween hese wo values. In addiion o his es, we ondu an analysis of he evoluion in he resuls over he pas five ediions and also onsider he laes developmens in all ounries displaying large swings. Based on his quaniaive and qualiaive analyses, he 03 Survey daa olleed in Bosnia and Herzegovina, Jordan, Oman, and he Unied Arab Emiraes appear o deviae signifianly from he hisorial rends, and reen developmens in hese ounries do no seem o provide enough jusifiaion for he large swings observed. For hese four ounries, herefore, we use only he 0 Survey daa in he ompuaion of his year s GCI. Alhough his remains The Global Compeiiveness Repor World Eonomi Forum

10 .3: The Exeuive Opinion Survey a remedial measure, we will oninue o invesigae he siuaion over he oming monhs in an effor o improve he represenaiveness of he Survey daa in hese ounries. Las year, he same analysis resuled in he Survey daa of four ounries Euador, Georgia, Rwanda, and Sri Lanka being removed. This year, as an inermediae sep oward he re-esablishmen of he sandard ompuaion mehod, we used a weighed average of he Survey daa of 0 for hese ounries ha is, he ediion preeding he problemai one and 03. COCLUSIO The World Eonomi Forum s Exeuive Opinion Survey remains he larges poll of is kind, apuring he insigh of more han 3,000 exeuives ino riial drivers of heir respeive ounries developmen. This sale ould no be ahieved wihou he remendous effors of he Forum s nework of over 60 Parner Insiues in arrying ou he Survey a a naional level. I gahers valuable informaion on a broad range of variables for whih daa soures are sare or nonexisen. For his reason, and for he inegriy of our publiaion and relaed researh, sampling and omparabiliy aross he globe remain an essenial and ongoing endeavor of The Global Compeiiveness and Benhmarking ework. 9 The ompleion rae is he proporion of answered quesions among he 3 quesions in he survey insrumen used in he ompuaion of he indexes. 0 In some ases, he informaion abou he ompany s seor of aiviy is missing. In hese ases, for any given ounry when he sample inludes a leas one survey wihou seor informaion, he average response values aross he surveys are apporioned o he oher seors aording o he sample sizes in hose oher seors. This has he effe of inluding hese surveys on a one-for-one basis as hey our in he sample ha is, wih no adjusmen for seor. Following he ompuaion of he seor-weighed ounry sores, for eah ounry we ompue he weigh of eah individual response in he sample. For any given ounry, if he individual weigh of a response exeeds 0 peren, we abandon he seor-weighed approah and apply a simple average aross all responses. OTES For Forum ompeiiveness publiaions, please see hp://www. weforum.org/onen/pages/ompeiiveness-library. For a number of ounries, 03 daa were no used. Please see he daa-ediing seion for furher deails. 3 The Exeuive Opinion Survey 03 is available in he following 4 languages 3 more han las year: Albanian, Arabi, Armenian, Azeri, Bosnian, Brazilian Poruguese, Bulgarian, Burmese, Chinese, Croaian, Czeh, Danish, Esonian, English, Frenh, German, Greek, Hebrew, Hungarian, Ialian, Japanese, Khmer, Korean, Lao, Lavian, Lihuanian, Maedonian, Mongolian, Monenegrin, Persian, Polish, Poruguese, Romanian, Russian, Serbian, Slovak, Slovenian, Spanish, Turkish, Urdu, and Vienamese. 4 In he ase of Tajikisan, he Survey was no ondued beause of a lak of learane for is adminisraion. 5 The World Eonomi Forum s Global Compeiiveness and Benhmarking ework would like o aknowledge e-rewards Marke Researh for arrying ou he Exeuive Opinion Survey 03 in he Unied Saes, olleing over 670 surveys following he deailed sampling guidelines. Furhermore, e-rewards supplemened a sample of 8 in Germany as well as 7 in India. 6 Company size is defined as he number of employees of he firm in he ounry of he Survey responden. The ompany size value used for delineaing he large and small ompany sample frames varies aross ounries. The size value raks losely wih he overall size of he eonomy. Adjusmens were made o he value based on searhes in ompany direories and daa gahered hrough he adminisraion of he Survey in pas years. 7 In order o reah he required number of surveys in eah ounry (80 for mos eonomies and 300 for he BRICs ounries and he Unied Saes), a Parner Insiue uses he response rae from previous years. 8 The resuls are he sores obained by eah eonomy in he various quesions of he Survey. The wo erms are used inerhangeably hroughou he ex. 9 The Global Compeiiveness Repor World Eonomi Forum

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