Korea fell four notches to 26th place in the 2014 World Competitiveness Yearbook by the Institute for Management Development in Switzerland.
The U.S., Switzerland and Singapore ranked first, second and third.
Korea lagged behind Japan (21st) and China (23rd). The country's competitiveness fell due to deteriorating efficiency in government (20th to 26th) and in the corporate sector (34th to 39th place). The IMD cited delays in the appointment of key government officials and tighter regulations on businesses.
But Korea ranked 12th in terms of its national brand value, outpacing Japan in 19th. This was due to increased interest in Korean culture around the world. Singapore ranked first in terms of national brand value, followed by Germany.