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The Ease of Doing Business Index as a tool for Investment location decisions

Author

Listed:
  • João Zambujal Oliveira

    (Centre for Management Studies (CEG-IST); Department of Engineering and Management (DEG); Technical University of Lisbon (UTL-IST))

  • Ricardo Pinheiro Alves

    (Instituto de Artes Visuais, Design e Marketing and Gabinete de Estratégia e Estudos do Ministério da Economia, da Inovação e do Desenvolvimento,Portugal)

Abstract

The 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.

Suggested Citation

  • João Zambujal Oliveira & Ricardo Pinheiro Alves, 2010. "The Ease of Doing Business Index as a tool for Investment location decisions," GEE Papers 0030, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Dec 2010.
    • Handle: RePEc:mde:wpaper:0030
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    File URL: https://www.gee.gov.pt/RePEc/WorkingPapers/GEE_PAPERS_30.pdf
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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • 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

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