Application of MCDA Technique for Investment Alternatives Under the Context of Social Impact Investment

Abstract

Recent discussions on upcoming industrial and social reform policies have brought the concept of social stock exchange in India. Before the introduction of such a step as discussed in various news media and articles, investigation into various opportunities and threats for such policy are required to be performed in the Indian context. The concept of social stock exchange is well-practiced in countries like Canada, Singapore, South Africa, United Kingdom. Under this context, this paper presents a scenario of choosing the best option for an individual investor, from among various investment alternatives under the implementation of social stock exchange in India. A multi-criteria decision analysis model has been applied for the purpose in order to rank the alternatives under a set of criteria such as tax benefits, return from organizations and risk involved. The proposed multi-criteria technique helps to rank the alternatives in the order of preference so that an individual can choose the best one among the alternatives. The scenario for an individual choice is an instance of various situations to be faced by an investor under the introduction of social stock exchange. A numerical example shows the application of the ranking problem as presented in this paper.