Measuring regional competitiveness through Data Envelopment Analysis: A Peruvian case

• This paper adapts the DEA method to develop a regional competitiveness index.
• The competitiveness of all the regions of Peru is measured and ranked.
• The developed index assesses the strengths and weaknesses of every region.
• Results reveal that coastal regions are the most competitive in the country.

It is well known that competitiveness has a positive effect on long-term economic growth. Concerned, thus, with creating and maintaining an environment that sustains more value creation for its enterprises and more prosperity for its people, the goal of this research paper is to assist the Peruvian national and regional policy makers, business, and academic community in their endeavor to improve regional and national competitiveness by means of developing a methodology based on Data Envelopment Analysis (DEA) to measure and rank the competitiveness of all the regions of Peru. It is important to highlight that DEA is a method that has never been used before in the calculation of regional competitiveness and this research paper is the first of its kind in Peru to adapt this method to develop a regional competitiveness index. Results revealed that coastal regions are highly competitive when compared to the mountains and jungle regions. Because of the large differences in the competitiveness of the regions of Peru, the research results point out to the need for a unified approach in creating a development strategy and improving the competitiveness of all the regions of Peru.