Business Excellence, Vol. 9 No. 1, 2015.
Preliminary communication
COUNTRY RISK ANALYSIS BASED ON ANALYTIC HIERARCHY PROCESS
Tonći Svilokos
orcid.org/0000-0003-4159-7918
; University of Dubrovnik, Department of Economics and Business
Mato Rodić
; University of Dubrovnik, Department of Economics and Business
Abstract
Country risk analysis includes an analysis of the numerous factors of political and economic risks that appears in a given country. It examines the strength of their impact on the business; it assigns to them quantitative values, and provides an overall assessment of the risks of doing business in a country. Because of its characteristics, country risk analysis can be taken as a problem of multi-criteria decision-making that includes both quantitative and qualitative criteria, and that can be solved applying the analytical hierarchy process (AHP).
This paper shows how to implement AHP method in order to perform the ranking of chosen countries in accordance to the selected political and economic country risk indicators. The paper contains the consistency analysis to verify the adequacy of evaluation of pairs of alternatives within each criterion and evaluation of pairs of criteria among themselves. Post optimal sensitivity analysis and dynamic analysis of preferences of alternatives has shown the changes of the obtained result if the importance of certain criterion increases or
decreases.
Keywords
Country risk; AHP method; multinationals; foreign direct investment; consistency; sensitivity analysis
Hrčak ID:
139867
URI
Publication date:
15.6.2015.
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