The Ease of Doing Business Index as a tool for Investment location decisions
AbstractThe Ease of Doing Business Index (EDBI) uses 41 variables to compare the business environment of different countries. It is widely used by policy makers, researchers and multinational companies. This paper aims to assess EDBI’s consistency and validity in representing the business environment by using factor analysis. It is found that the EDBI presents a limited consistency and descriptive power of a country’s business environment. The consequence of these findings is that multinational firms should handle carefully the EDBI in their investment decisions.
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Bibliographic InfoPaper provided by Gabinete de Estratégia e Estudos, Ministério da Economia e da Inovação in its series GEE Papers with number 0030.
Length: 19 pages
Date of creation: Dec 2010
Date of revision: Dec 2010
Location Decisions; Factor Analysis; Cross-Border Investments; Institutional Environment;
Other versions of this item:
- Pinheiro-Alves, Ricardo & Zambujal-Oliveira, João, 2012. "The Ease of Doing Business Index as a tool for investment location decisions," Economics Letters, Elsevier, vol. 117(1), pages 66-70.
- C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-23 (All new papers)
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