Abstract
This article assesses country-risk of sixteen Central, Baltic and South-East European transition countries, for 2005 and 2007, using multivariate cluster analysis. It was aided by the appropriate ANOVA (analysis of variance) testing and the multicriteria PROMETHEE method. The combination of methods makes for more accurate and efficient country-risk assessment. Country risk classifications and ratings involve evaluating the performance of countries while considering their economic and socio-political characteristics. The purpose of the article is to classify, and then find the comparative position of each individual country in the group of analyzed countries, in order to find out to which extent development of market economy and democratic society has been achieved.
Highlights
An initial preprocessing of the available data led to the selection of 15 socio-political and economic-financial country-risk indicators: electoral process (EP), civil society (CS), independent media (IM), national democratic governance (NDG), local democratic governance (LDG) (governance (G)), judicial framework & independence (JFI), corruption (C), life expectancy of birth (LE), GDP (US$) billions, exports of goods and services/GDP (EGS/GDP), current account balance/GDP (CAB/GDP), annual GDP growth (AGDP), inflation (ICP), and FDI-net flow (US$) billions, and market capitalization (MC) of listed companies (% of GDP) in 2007
It can be noticed that instead of the Czech Republic, Poland takes up the leadership in 2007
The first is country-risk assessment of European transitional countries, and the second is to make a contribution to methodology
Summary
An initial preprocessing of the available data led to the selection of 15 socio-political and economic-financial country-risk indicators: electoral process (EP), civil society (CS), independent media (IM), national democratic governance (NDG), local democratic governance (LDG) (governance (G)), judicial framework & independence (JFI), corruption (C), life expectancy of birth (LE), GDP (US$) billions, exports of goods and services/GDP (EGS/GDP), current account balance/GDP (CAB/GDP), annual GDP growth (AGDP), inflation (ICP), and FDI-net flow (US$) billions, and market capitalization (MC) of listed companies (% of GDP) in 2007. Electoral Process (EP) Civil Society (CS) Independent Media (IM) National Democratic Governance (NDG) Local democratic governance (LDG) Governance (G) Judicial Framework & Indep. All sociopolitical criteria are included; in another case, all of them are included as a democracy score indicator—which is an average of ratings for all six socio-political indicators—and only the economic-financial indicators are included
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