Towards an impartial Responsible Competitiveness Index: a twofold multivariate I-distance approach

Abstract

Issues surrounding the measurement of corporate social responsibility (CSR) are complex and far-reaching. The indicator based measurement of CSR has started to play an important role in defining the national level of CSR, but the controversy about the choice of indicators and weights assigned to them still remains. This paper has two goals: first, to analyze the Responsible Competitiveness Index (RCI), a composite index which shows how countries are performing in their efforts to promote and apply responsible business practices and second, to review the current indicators used in calculating this index in an effort to form a new theoretical framework. A statistical I-distance method which is able to overcome the problems concerning the aggregation of a composite index that uses subjective weighting factors was used. In a case study we scrutinized two data sets: the official one of 108 countries for the year 2007 was analyzed using I-distance methodology and the one we recreated of 98 countries for year 2013 was analyzed using a twofold I-distance approach. A twofold approach gave an insight to not just domain dynamics, but also to total score dynamic. The results presented in this research paper clearly point out countries with high level of social responsibility and a framework for improvement of the RCI. The framework proposed here can assist in the evaluation of other CSR indexes. Moreover, our approach can be a foundation for further academic CSR research which will be independent from subjectively formed weighting factors.