Abstract
As an important indicator for measuring the quality of business environment of different countries, ease of doing business (EDB) issued by the World Bank (WB) provides an important reference for investors in making decisions on transnational investment. The calculation method for EDB issued by the WB is improved using a technique for order preference by similarity to an ideal solution (TOPSIS) method based on Mahalanobis distance. Based on various indicator data in 2019, business environments in 121 countries participating in “the Belt and Road Initiative (BRI)” were empirically analysed and compared through such models. The result showed that TOPSIS method based on Mahalanobis distance can more fully utilise information and take the effect of negative ideal points into account. Therefore, compared with ranking method by the WB, TOPSIS method based on Mahalanobis distance is more applicable for ranking BRI countries. The ranking results indicated significant geographical characteristics. The EDB rankings obtained through the WB overestimate the business environments of countries in Central and Eastern Europe while underestimate those in Southeast Asia, Africa, etc.
Highlights
The traditional TOPSIS method inevitably shows the drawback of causing information loss (Wang & Wang, 2014; Wang et al, 2018) while Mahalanobis distance can favourably solve the problem of linear correlation between indicators (Ke et al, 2018; Hamill et al, 2016; González-Arteaga et al, 2016) and compensate for deficiencies in the traditional TOPSIS method
The Pearson correlation coefficients between the closeness obtained through the traditional TOPSIS method and Mahalanobis distance-based TOPSIS with the ranking result issued by the World Bank (WB) are –0.986 and –0.897, both of them are statistically significant at the 1% level
The ranking issued by the WB was collected and using the traditional TOPSIS method and Mahalanobis distance-based TOPSIS, the ease of doing business (EDB) of 121 Belt and Road Initiative (BRI) countries is ranked
Summary
“The Belt and Road Initiative” (BRI), as a major strategic measure for expanding openingup, was proposed by the Chinese Government in 2013. The innovation in the research is as follows: 1) Based on data concerning all primary indicators in the WB’s Doing Business database, the business environments of BRI countries are assessed by using traditional TOPSIS method to calculate the closeness of indicators of various countries On this basis, all BRI countries are ranked, in expecting to solve the problem of only considering gap of each country to the country with frontier score while ignoring that to the country with the lowest score when calculating EDB scores. The rest of the study is organized as follows: Section 1 introduces evaluation methods, involving traditional TOPSIS method and Mahalanobis distance-based TOPSIS; Section 2 empirically analyses the ranking of business environments of BRI countries and discusses the evaluation result from statistical and geographical perspectives; last Section concludes
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