Determination of the countries with prioritizing for FDI destination using multi-criteria decision making method

Abstract

FDI is a long-term investment, when it comes to choosing a country to invest in it is important to study the factors affecting the decision of the country to invest in order to rank the countries to answer which countries are better for foreign investment. This paper aims to rank the countries for FDI destinations. Multi-criteria Decision Making (MCDM) using Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) method is used to rank the country performance of 139 countries in terms of FDI destinations. The countries ranking can measures the quality or attractiveness of the business environment in the 139 countries. A better ranking for an economy can imply that its investment climate is favourable to foreign investors. According to the calculation by using TOPSIS, the performance evaluation of 139 countries is carried out. The proposed methodology shows that the prospect top 10 countries for FDI in the descending order are United States, China, Hong Kong, Germany, United Kingdom, Netherlands, Ireland, Singapore, Canada, and Japan, respectively and Thailand ranked 56 out of 139 countries.