Shedding Light on the Doing Business Index: a Machine Learning Approach

Abstract

Background: The World Bank (WB) acknowledged the importance of business regulatory environment and therefore created a metric which ranks 190 countries based on their level of business regulation for domestic firms measured by the Doing Business Index (DBI).Objectives: The question which attracted our attention is whether all the observed entities should be given the same weighting scheme.Methods/Approach: The approach we propose as an answer is two-fold. First, we cluster the countries covered by the DBI. In the next step, we apply the statistical multivariate Composite I-distance Indicator (CIDI) methodology to determine new, data-driven weights for each of the retained clusters.Results: The obtained results show that there is a difference between the weighting schemes proposed by the CIDI methodology.Conclusions: One can argue that one weighting scheme does not fit all the observed countries, meaning that additional analyses on the DBI are suggested to explore its stability and its weighting scheme.

How Important Is the Business Environment for The Performance of Enterprises? Case Study of Selected European Countries

“…Moreover, countries with a high score on the DBI index tend to have a lower level of corruption and a higher level of business activity. The DBI index as an important indicator of the business regulatory environment was analysed by Maricic et al (2019) and Holden and Pekmezovic (2020). However, their findings revealed that the weighting scheme and conceptual grounds are not appropriate for all countries, which can result in discrepancies compared to other global multi-criteria indices.…”

“…Slightly dissimilar outputs are presented by the DBI index (see Kiselakova et al, 2019b), where the quality of the business environment in the Baltic countries, Poland, and Germany have ranked alike, achieving the best results. The discrepancy between the subsets of countries formed by different indices may be caused by different factors used to form the applied measures (Perenyi et al, 2020) or, as stated by Maricic et al (2019), by the incorrect weighting scheme used in some global indices (DBI index).…”

Multinational Firm Growth and Sustainability Responses to Dynamics of Business Regulations in Host Market

“…These three variables include starting a business, dealing with firms' establishment's permits, and registering multinational business property. The concepts were drawn from but not limited to references [50][51][52][53].…”

Deep Learning Predictive Models for Terminal Call Rate Prediction during the Warranty Period

“…Predictive analytics more specifically, has been used in many business applications such as customer relationship management, predicting crimefighting in law enforcement, predicting warranty problems for automobile manufacturers, predicting change in stock price, etc. (Chan, 2007;Maričić et al, 2019). In the past few years, different methods for validating the reliability prediction model of electric products were used such as time series models and the ARIMA model, fuzzy methods, neural networks and expert systems (Li et al, 2010).…”