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The role of interest rate in investment decisions: a fuzzy logic framework

Author

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  • David Han-Min Wang
  • Tiffany Hui-Kuang Yu

Abstract

This paper examines the role of the interest rate in investment decisions for firms in Taiwan. To reflect the human side of decision making and the uncertain nature of information provided, we employ fuzzy set theory and fuzzy logic to examine the nonlinear relationship between these two factors. The results reveal the fact that the interest rate plays an important role in investment decisions. The fuzzy logic theory, replacing the complication model, can explain how the optimisation investment behaviour can be reached.

Suggested Citation

  • David Han-Min Wang & Tiffany Hui-Kuang Yu, 2007. "The role of interest rate in investment decisions: a fuzzy logic framework," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 9(4), pages 448-457.
  • Handle: RePEc:ids:gbusec:v:9:y:2007:i:4:p:448-457
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    Citations

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    Cited by:

    1. Saba Mushtaq & Danish Ahmed Siddiqui, 2016. "Effect of interest rate on economic performance: evidence from Islamic and non-Islamic economies," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 2(1), pages 1-14, December.
    2. Faris Alshubiri, 2022. "The Impact of the Real Interest Rate, the Exchange Rate and Political Stability on Foreign Direct Investment Inflows: A Comparative Analysis of G7 and GCC Countries," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 29(3), pages 569-603, September.
    3. Muhammad Waqas Chughtai & Muhammad Waqas Malik & Rashid Aftab, 2015. "Impact of Major Economic Variables on Economic Growth of Pakistan," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 11(2), pages 94-106, April.

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