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The attractiveness of countries for FDI. A fuzzy approach

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  • Marina Murat
  • Tommaso Pirotti

Abstract

This paper presents a new method for measuring the attractiveness of countries for FDI. A ranking is built using a fuzzy expert system whereby the function producing the final evaluation is not necessarily linear and the weights of the variables, usually defined numerically, are replaced by linguistic rules. More precisely, weights derive from expert opinions and from econometric tests on the determinants of countries’ FDI. As a second step, the view-point of investors from two different investing economies, the UK and Italy, are taken into account. Country-specific factors, such as the geographic, cultural and institutional distances existing between the investing and the partner economies are included in the analysis. This shows how the base ranking changes with the investor’s perspective.

Suggested Citation

  • Marina Murat & Tommaso Pirotti, 2010. "The attractiveness of countries for FDI. A fuzzy approach," Center for Economic Research (RECent) 055, University of Modena and Reggio E., Dept. of Economics "Marco Biagi".
    • Handle: RePEc:mod:recent:055
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    References listed on IDEAS

    as
    1. Kugler, Maurice & Rapoport, Hillel, 2007. "International labor and capital flows: Complements or substitutes?," Economics Letters, Elsevier, vol. 94(2), pages 155-162, February.
    2. Marina Murat & Barbara Pistoresi, 2009. "Emigrant and immigrant networks in FDI," Applied Economics Letters, Taylor & Francis Journals, vol. 16(12), pages 1261-1264.
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    Cited by:

    1. Francesco Pagliacci, 2017. "Measuring EU Urban-Rural Continuum Through Fuzzy Logic," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 108(2), pages 157-174, April.
    2. Sebastian Tocar, 2019. "Culture-specific Investment Attractiveness Index: An Original Composite Indicator," International Journal of Economics and Financial Issues, Econjournals, vol. 9(4), pages 203-211.
    3. Enrico Giovannetti & Francesco Pagliacci, 2010. "A Multi-Scalar Analysis of European Cities," Department of Economics 0641, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    4. Bj�rn Fastrich & Sandra Paterlini & Peter Winker, 2014. "Cardinality versus q -norm constraints for index tracking," Quantitative Finance, Taylor & Francis Journals, vol. 14(11), pages 2019-2032, November.

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    More about this item

    Keywords

    foreign direct investments; fuzzy expert systems; attractiveness;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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