Application of Multi-Criteria Decision-Making Model and GM (1,1) Theory for Evaluating Efficiency of FDI on Economic Growth: A Case Study in Developing Countries

Chia-Nan Wang and Anh Phuong Le
Additional contact information
Chia-Nan Wang: Department of Industrial Engineering and Management, National Kaohsiung University of Science and Technology, Kaohsiung 80778, Taiwan
Anh Phuong Le: Department of Industrial Engineering and Management, National Kaohsiung University of Science and Technology, Kaohsiung 80778, Taiwan

Sustainability, 2019, vol. 11, issue 8, 1-29

Abstract: Foreign direct investment (FDI) and corporate social responsibility (CSR) spending are one of the major factors in improving sustainable economic development of a country. Therefore, this study focuses on the multi criteria application of FDI and sustainability factors (CSR spending) in various developing countries to explore its impact and decision making for sustainable economic growth. The study uses a case study methodology whereby FDI, exchange rate, and CSR expenditure data from 20 countries were used to assess the efficiency in sustainable economic growth. Data were collected from the World Bank for 20 Asian and African developing countries during 2012–2017 and analyzed using GM (1,1), mean absolute percentage error (MAPE), Malmquist productivity index (MPI)-data envelopment analysis (DEA), and the slacks-based measure of efficiency (SBM) model. Correlation analysis is used to find the relationship for FDI, CSR, exchange rate, gross domestic product (GDP), and GDP per capita (GDPPC). The results of the Malmquist productivity index and the frontier effect clearly highlight that a few countries have witnessed a great improvement in terms of productivity and technological progression. Therefore, the decision makers must adopt the model of those countries with respect to sustainable development of the nation. This study helps developing nations as well as researchers to benchmark efficient countries and follow their strategies to develop a new one for utilizing FDI and CSR spending in sustainable economic development. The study also helps policy makers in multi criterion application of FDI and CSR for decision making in economic development.

Keywords: FDI; CSR spending; sustainable economic development; GM (1,1); DEA; MCDM (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.mdpi.com/2071-1050/11/8/2389/pdf (application/pdf)
https://www.mdpi.com/2071-1050/11/8/2389/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:8:p:2389-:d:225009

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().