Shedding Light on the Doing Business Index: a Machine Learning Approach

Maričić Milica (), Bulajić Milica (), Radojičić Zoran () and Jeremić Veljko ()
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Maričić Milica: University of Belgrade, Faculty of Organizational Sciences, Department of Operational Research and Statistics, Belgrade, Serbia
Bulajić Milica: University of Belgrade, Faculty of Organizational Sciences, Department of Operational Research and Statistics, Belgrade, Serbia
Radojičić Zoran: University of Belgrade, Faculty of Organizational Sciences, Department of Operational Research and Statistics, Belgrade, Serbia
Jeremić Veljko: University of Belgrade, Faculty of Organizational Sciences, Department of Operational Research and Statistics, Belgrade, Serbia

Business Systems Research, 2019, vol. 10, issue 2, 73-84

Abstract: Background: The World Bank (WB) acknowledged the importance of business regulatory environment and therefore created a metric which ranks 190 countries based on their level of business regulation for domestic firms measured by the Doing Business Index (DBI).Objectives: The question which attracted our attention is whether all the observed entities should be given the same weighting scheme.Methods/Approach: The approach we propose as an answer is two-fold. First, we cluster the countries covered by the DBI. In the next step, we apply the statistical multivariate Composite I-distance Indicator (CIDI) methodology to determine new, data-driven weights for each of the retained clusters.Results: The obtained results show that there is a difference between the weighting schemes proposed by the CIDI methodology.Conclusions: One can argue that one weighting scheme does not fit all the observed countries, meaning that additional analyses on the DBI are suggested to explore its stability and its weighting scheme.

Keywords: CIDI methodology; Doing Business Index; international business; machine learning algorithms (search for similar items in EconPapers)
JEL-codes: C38 C43 F23 M16 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:bit:bsrysr:v:10:y:2019:i:2:p:73-84:n:6

DOI: 10.2478/bsrj-2019-019

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