Building Ease-of-Doing-Business synthetic indicators using a double reference point approach

Publication date: June 2018 Source:Technological Forecasting and Social Change, Volume 131 Author(s): Francisco Ruiz, José M. Cabello, Blanca Pérez-Gladish Investment decision making may require the selection of the geographical areas where the investments will be mainly done. A large number of factors could influence this decision such as the country business atmosphere, the human development level of the country and/or its political and macroeconomic stability. In this paper, we are mainly concerned with those aspects related to the ease of doing business in terms of countries' regulation. The World Bank Group publishes indicators on regulation for doing business, and they also provide a composite indicator. However, due to the aggregation method, this composite indicator does not fully reflect situations where a country performs well with respect to one indicator and very bad with respect to another. In this work, we propose the use of a Double Reference Point based methodology to obtain synthetic indicators allowing for different degrees of compensation. We will compare the obtained results with those obtained by the World Bank, highlighting the potential advantages of our approach. Comparison will be done taking into account the imprecision, ambiguity and uncertainty of the data by means of the Fuzzy Degree of Similarity between two rankings.

Source: Technological Forecasting and Social Change - April 3, 2018 Category: Science Source Type: research