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Country’s International Reputation Index

Abstract

Nowadays it is very common to make decisions about our actions and behaviors based on a series of perceptions, which have been created according to a series of variables, and in many cases their deep knowledge is unnecessary. The purpose of this paper is to create an index to measure the reputation of a country based on a financial markets perspective to see how attractive a country is for foreign investors by neutral, constant, and officials measurement criteria. Data for 28 countries have been taken from several officials databases and the method used is principal component analysis. The index is a combination of four different dimensions: (1) markets and trade, (2) national accounts, (3) labor market, (4) living conditions and security, along with 23 distinct factors. The top scores in this index are the United Kingdom, Germany, and Sweden, compared to Bulgaria, Croatia, and Greece, which are at the bottom of the table. In general, the best ranked countries receive high scores in all four dimensions, while the worst ranked countries tend to receive low scores in all four dimensions analyzed. Country’s international reputation index could be used to assist public policies designed to improve reputation in countries where it is needed. The study and analysis of this index will make it possible to measure the evolution of the factors that affect the country, both positively and negatively, in order to identify both strengths and weaknesses in order to improve the latter. This paper is the first to explore the dimensions comprising the international reputation construct at a multinational scope in Europe from an empirical analysis using officials datasets. Although other indexes have been widely used for many country-branding projects, they only show what is being measured by interviews or panel of experts but not by neutral, constant and officials measurement criteria, and therefore this paper fills the gap that exists in the current state-of-the-art.

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Correspondence to J. M. Fernandez-Crehuet.

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This paper was partially written while Jose Maria Fernandez-Crehuet was Visiting Fellow at Harvard University, to which he would like to express his thanks for the hospitality and facilities provided.

Appendix: Results for the Principal Components Analysis (PCA)

Appendix: Results for the Principal Components Analysis (PCA)

See Tables 6, 7, 8, 9, 10, 11, 12, and 13.

Table 6 Eigenvalues for variables included in dimension “markets and trade”
Table 7 Rotated factor loadings for variables included in dimension “markets and trade”
Table 8 Eigenvalues for variables included in dimension “national accounts”
Table 9 Rotated factor loadings for variables included in dimension “national accounts”
Table 10 Eigenvalues for variables included in dimension “labor market”
Table 11 Rotated factor loadings for variables included in dimension “labor market”
Table 12 Eigenvalues for variables included in dimension “living conditions and security”
Table 13 Rotated factor loadings for variables included in dimension “living conditions and security”

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Fernandez-Crehuet, J.M., Rosales-Salas, J. & Cogollos, S.D. Country’s International Reputation Index. Corp Reputation Rev 24, 14–30 (2021). https://doi.org/10.1057/s41299-019-00088-8

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Keywords

  • Country reputation index
  • Principal component analysis
  • Reputation ranking