The Ease of Doing Business Index as a Tool for Investment Location Decisions

J. Zambujal-Oliveira (j.zambujal.oliveira@ist.utl.pt) and Ricardo Pinheiro-Alves

No 2011.2, Working Papers from International Network for Economic Research - INFER

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.

Keywords: Location Decisions; Factor Analysis; Cross-Border Investments; Institutional Environment (search for similar items in EconPapers)
Pages: 23 pages
Date: 2011
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Related works:
Journal Article: The Ease of Doing Business Index as a tool for investment location decisions (2012)
Working Paper: The Ease of Doing Business Index as a tool for Investment location decisions (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:inf:wpaper:2011.2

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