A Novel Integrated PCA-DEA-IMF SWARA-CRADIS Model for Evaluating the Impact of FDI on the Sustainability of the Economic System

Abstract

Today’s economic systems are, on the one hand, exposed to various risks and uncertainties with their trends changing almost daily, while on the other hand, they represent an extremely complex system with a large number of sustainable influential parameters. The challenge is to model macroeconomic parameters and achieve sustainability, yet also satisfy conflict situations with an increased level of uncertainty. The aim of this paper is to create an appropriate functional model by examining the mutual influence of various macroeconomic factors. It assesses a total of four scenarios considering mutual influences of: FDI (foreign direct investments), GDP (gross domestic product), imports, exports, inflation rate, RER (real exchange rate) and employment rate as defined parameters. First, the DEA (Data envelopment analysis) model was applied to determine the initial efficiency of two countries, Bosnia and Herzegovina (BIH) and Serbia, for the period 2005–2020. Then, PCA (Principal Component Analysis) was applied in combination with DEA to obtain more precise values. In addition, IMF SWARA (Improved Fuzzy Stepwise Weight Assessment Ratio Analysis) was applied to define weight coefficients of macro-economic parameters. Finally, the CRADIS (compromise ranking of alternatives from distance to ideal solution) model was applied for the final ranking of part of decision-making units. This developed, integrated model can be classified as a mathematical method for economic analysis and gives extended opportunities for solving different problems. The results show that 2009, 2013 and 2016 were the most favorable years in terms of the conditions set when it comes to Bosnia and Herzegovina, and 2012, 2014 and 2016 when it comes to Serbia. These years have been singled out and can be a benchmark for further handling and modeling of macroeconomic elements. In addition, correlation was tested using statistical coefficients.

Selection of Suitable Data Normalization Method to Combine with the CRADIS Method for Making Multi-Criteria Decision

“…The third section of this study presents the steps to perform the CRADIS method. Although it has only been found for a short time, several studies ranking the solutions in various fields such as in the selection of agricultural machines [4], evaluating the effects of FDI (Foreign Direct Investments) on the sustainability of the economic system [5], ranking forty-six countries based on three criteria including energy, environment, and sustainability [6], evaluating the Global innovation index of the countries in the Western Balkans [7]. This method has also been improved into the fuzzy CRADIS method for ranking the pear varieties in Serbia [8] and for selecting green suppliers [9].…”

Multi-Criteria Decision-Making Model for Evaluating Safety of Road Sections

“…This test implies that in each scenario the worst alternative is eliminated and the model is reproduced again. In the last test, it was performed a comparative analysis with MARCOS [14], CRADIS [15,16], WASPAS [17], ARAS [18], SAW [19]. The comparative analysis (Figure 6) shows that there are certain deviations in the ranks, but which are generally highly correlated with the original model.…”

“…Then A3 takes the fourth instead of the third position, i.e. exchange the position with A4.In the last test, it was performed a comparative analysis with MARCOS[14], CRADIS[15,16], WASPAS[17], ARAS[18], SAW[19].…”

An integrated fuzzy MCDM model for prioritizing strategies for successful implementation and operation of the bus rapid transit system

“…The improved fuzzy SWARA is introduced by Vrtagić et al ( 2021 ). After that, many researchers have applied it to many fields such as the assessment of logistics village (Zolfani et al, 2021 ), healthcare system evaluation (Vojinović et al, 2022 ), construction machinery selection (Matić et al, 2022 ), the impact of vehicles on the safety of traffic (Damjanović et al, 2022 ), transportation of dangerous goods (Vojinović et al, 2021 ), sustainability of the economic system (Starčević et al, 2022 ), and production optimization (Dordevic et al, 2022 ). The improved fuzzy SWARA comprises five subsequent steps as follows:…”