Investments Attractiveness via Combinatorial Optimization Ranking
The paper proposes an approach to ranking a set of potential countries to invest taking into account the investor point of view about importance of different economic indicators. For the goal, a ranking algorithm that contributes to rational decision making is proposed. The described algorithm is based on combinatorial optimization modeling and repeated multi-criteria tasks solution. The final result is list of countries ranked in respect of investor preferences about importance of economic indicators for investment attractiveness. Different scenarios are simulated conforming to different investors preferences. A numerical example with real dataset of indicators is solved. The numerical testing shows the applicability of the described algorithm. The proposed approach can be used with any sets of indicators as ranking criteria reflecting different points of view of investors.
[1] Investment climate statements, U.S. Department of State,
http://www.state.gov/e/eb/rls/othr/ics/
[2] Investment Climate – data and indicators, World Bank Group (US),
International Finance Corporation, https://www.wbginvestmentclimate.
org/research-and-diagnostics/
[3] Investopedia – Investment climate, http://www.investopedia.com/
terms/i/investmentclimate.asp
[4] Investment Policy Framework for Sustainable Development, United
Nations Conference on Trade and Development – UNCTAD
http://unctad.org/en/PublicationsLibrary/diaepcb2012d5_en.pdf
[5] M. Ballotta, Factors, Actions and policies to determine the investment
attractiveness of a territorial system. World Bank, WBI/PSD Investment
Climate Seminar Series. Washington, 29th January 2004,
http://info.worldbank.org/etools/docs/library/136063/ballotta.pdf
[6] M. Baltzer, O. Stolper, A. Walter. “Is local bias a cross-border
phenomenon? Evidence from individual investors’ international asset
allocation”, Journal of Banking & Finance, vol. 37, no 8, pp. 2823-
2835, 2013.
[7] I. Mia, J. Estrada, T. Geiger, “Benchmarking National attractiveness for
private investment in Latin American infrastructure”, in World
Economic Forum, REF: 200407, 2007 (http://
www3.weforum.org/docs/WEF_GCR_BenchmarkingNationalAttractive
ness_PrivateInvestmentLA_2007.pdf)
[8] A. Groh, H. Liechtenstein, K. Lieser, “The venture capital and private
equity country attractiveness index 2013 annual”,
http://blog.iese.edu/vcpeindex/
[9] Back to Business: Optimism Amid Uncertainty. The 2013 A.T. Kearney
Foreign Direct Investment Confidence Index®, http://www.atkearney.
com/research-studies/foreign-direct-investment-confidence-index
[10] K. Savard, H. Wickramarachi with R. C. Devol and A. (Penny) Prabha,
“2013 Global opportunity index: Attracting foreign investment”, Milken
Institute, March 18, 2013, http://www.milkeninstitute.org
/pdf/GlobalOpportunityIndex.pdf
[11] Global cities investment monitor 2012 new rankings, trends and criteria.
Greater Paris Investment Agency, ISBN 2-914687-10-9.
http://www.kpmg.com/FR/fr/IssuesAndInsights/News/Documents/GPIA
-KPMG-CIM-2012.pdf
[12] Attractiveness surveys, EY - Global - Ernst & Young. http://www.ey.
com/GL/en/Issues/Business-environment/Ernst---Young-attractivenesssurveys
[13] M. Cutts, M. Riley, R. Marriott, A. Kirk, B. Carlisle, “Global
infrastructure investment index”, EC HARRIS,
http://www.echarris.com/PDF/8437_International%20Infrastructure%20
Investment%20Index%20FINAL%20FOR%20WEB.pdf
[14] Economy rankings, The World Bank, 2013, http://www.doingbusiness.
org/rankings
[15] The Concise Encyclopedia of Economics – V. Pareto,
http://www.econlib.org/library/Enc/bios/Pareto.html
[16] E. Triantaphyllou, Multi-Criteria Decision Making: A Comparative
Study. Springer, p. 320. 2000.
[17] C. Erner, A. Klos, T. Langer, “Can prospect theory be used to predict an
investor’s willingness to pay?” Journal of Banking & Finance, vol. 37,
no 6, pp. 1969-1973, 2013.
[18] T. Gal, T. J. Stewart, T. Hanne. International Series in Operations
Research & Management Science, Springer, 1999.
[19] G. Ashry, “On globally convergent multi-objective optimization”,
Applied Mathematics and Computation, vol. 183, no 1, pp. 209-216,
2006.
[20] R. Marler, J. Arora. “Survey of multi-objective optimization methods for
engineering”, Structural and Multidisciplinary Optimization, vol. 26, pp.
369-395, 2004.
[21] Lindo Systems Inc., http://www.lindo.com/
[1] Investment climate statements, U.S. Department of State,
http://www.state.gov/e/eb/rls/othr/ics/
[2] Investment Climate – data and indicators, World Bank Group (US),
International Finance Corporation, https://www.wbginvestmentclimate.
org/research-and-diagnostics/
[3] Investopedia – Investment climate, http://www.investopedia.com/
terms/i/investmentclimate.asp
[4] Investment Policy Framework for Sustainable Development, United
Nations Conference on Trade and Development – UNCTAD
http://unctad.org/en/PublicationsLibrary/diaepcb2012d5_en.pdf
[5] M. Ballotta, Factors, Actions and policies to determine the investment
attractiveness of a territorial system. World Bank, WBI/PSD Investment
Climate Seminar Series. Washington, 29th January 2004,
http://info.worldbank.org/etools/docs/library/136063/ballotta.pdf
[6] M. Baltzer, O. Stolper, A. Walter. “Is local bias a cross-border
phenomenon? Evidence from individual investors’ international asset
allocation”, Journal of Banking & Finance, vol. 37, no 8, pp. 2823-
2835, 2013.
[7] I. Mia, J. Estrada, T. Geiger, “Benchmarking National attractiveness for
private investment in Latin American infrastructure”, in World
Economic Forum, REF: 200407, 2007 (http://
www3.weforum.org/docs/WEF_GCR_BenchmarkingNationalAttractive
ness_PrivateInvestmentLA_2007.pdf)
[8] A. Groh, H. Liechtenstein, K. Lieser, “The venture capital and private
equity country attractiveness index 2013 annual”,
http://blog.iese.edu/vcpeindex/
[9] Back to Business: Optimism Amid Uncertainty. The 2013 A.T. Kearney
Foreign Direct Investment Confidence Index®, http://www.atkearney.
com/research-studies/foreign-direct-investment-confidence-index
[10] K. Savard, H. Wickramarachi with R. C. Devol and A. (Penny) Prabha,
“2013 Global opportunity index: Attracting foreign investment”, Milken
Institute, March 18, 2013, http://www.milkeninstitute.org
/pdf/GlobalOpportunityIndex.pdf
[11] Global cities investment monitor 2012 new rankings, trends and criteria.
Greater Paris Investment Agency, ISBN 2-914687-10-9.
http://www.kpmg.com/FR/fr/IssuesAndInsights/News/Documents/GPIA
-KPMG-CIM-2012.pdf
[12] Attractiveness surveys, EY - Global - Ernst & Young. http://www.ey.
com/GL/en/Issues/Business-environment/Ernst---Young-attractivenesssurveys
[13] M. Cutts, M. Riley, R. Marriott, A. Kirk, B. Carlisle, “Global
infrastructure investment index”, EC HARRIS,
http://www.echarris.com/PDF/8437_International%20Infrastructure%20
Investment%20Index%20FINAL%20FOR%20WEB.pdf
[14] Economy rankings, The World Bank, 2013, http://www.doingbusiness.
org/rankings
[15] The Concise Encyclopedia of Economics – V. Pareto,
http://www.econlib.org/library/Enc/bios/Pareto.html
[16] E. Triantaphyllou, Multi-Criteria Decision Making: A Comparative
Study. Springer, p. 320. 2000.
[17] C. Erner, A. Klos, T. Langer, “Can prospect theory be used to predict an
investor’s willingness to pay?” Journal of Banking & Finance, vol. 37,
no 6, pp. 1969-1973, 2013.
[18] T. Gal, T. J. Stewart, T. Hanne. International Series in Operations
Research & Management Science, Springer, 1999.
[19] G. Ashry, “On globally convergent multi-objective optimization”,
Applied Mathematics and Computation, vol. 183, no 1, pp. 209-216,
2006.
[20] R. Marler, J. Arora. “Survey of multi-objective optimization methods for
engineering”, Structural and Multidisciplinary Optimization, vol. 26, pp.
369-395, 2004.
[21] Lindo Systems Inc., http://www.lindo.com/
@article{"International Journal of Business, Human and Social Sciences:65312", author = "Ivan C. Mustakerov and Daniela I. Borissova", title = "Investments Attractiveness via Combinatorial Optimization Ranking", abstract = "The paper proposes an approach to ranking a set of potential countries to invest taking into account the investor point of view about importance of different economic indicators. For the goal, a ranking algorithm that contributes to rational decision making is proposed. The described algorithm is based on combinatorial optimization modeling and repeated multi-criteria tasks solution. The final result is list of countries ranked in respect of investor preferences about importance of economic indicators for investment attractiveness. Different scenarios are simulated conforming to different investors preferences. A numerical example with real dataset of indicators is solved. The numerical testing shows the applicability of the described algorithm. The proposed approach can be used with any sets of indicators as ranking criteria reflecting different points of view of investors.
", keywords = "Combinatorial optimization modeling, economics investment attractiveness, economics ranking algorithm, multi-criteria problems. ", volume = "7", number = "10", pages = "2678-6", }
