Evaluating Business Environment In Africa Using Improved ROC Weights And WSM

As Chinese investments grow in Africa,the decision in which country to begin investment is of great importance to investors.Business environment is one of the most important factors that influences investors decision.Investing in Africa is a complex decision-making problem when considering every factor that affects African business environment,the business environment evaluation as well as determining investors objectives.Multi-Criteria Decision Making(MCDM)approach is used in addressing this problem by improving traditional methods because of the complexity of the research question.The innovation and contributions of this thesis are in three aspects:Firstly,an improved hierarchical model for evaluating Africa business environment is provided in this thesis.The hierarchical model is deduced from the Doing Business Project(DBP)by the World Bank.This thesis empirically validated the hierarchical model for Africa business environment based on Partial Least Squares(PLS)Structural Equation Modelling(SEM),and 26 criteria are theoretically valid for evaluating Africa by removing the DBP indicators that are not able to explain the African business environment.The improved evaluation hierarchical model compared to the DBP indicators provides a 48.64% reduction in the number of measured variables,as well as a 26.4% increment on the Average Variance Extracted(AVE).Secondly,a new kind of weighting method called the Grey Relational Analysis – Integral Linear Programming – Rank Order Centroid(GRA-ILP-ROC)weighting method for determining the weights of indicators in group decision-making is proposed by combining three methods;the Grey Relational Analysis(GRA),Integer Linear Programming(ILP)approach and Rank Order Centroid(ROC)weights.To begin,grey numbers that correspond to the linguistic values are used to calculate the weights of the criteria.Next,the GRA based on grey numbers is used to evaluate the indicators according to their level of importance.The weights of the indicator are determined using the ROC weighting method.Simultaneously,a major limitation of determining the grey distinguishing coefficient is addressed using Integer Linear Programming(ILP)approach to improve the GRA by a pairwise comparison of the weights to determine the grey possibility degrees that an indicator is more important,and thereafter the rankings of the indicators are transformed to weights.This approach does not require determining the grey distinguishing coefficient.Thirdly,the Weighted Sum Model with Time Weights(WSM-TW),Grey Weighted Sum Model(GWSM)and the Integral Linear Programming with Grey Possibilities(ILP-GP)approaches are proposed for African business environment evaluation.As a result of the dynamic nature of business environment and its indicator system,this thesis first proposed the WSM-TW that at assigns weights to different years the data are worth using the ROC weighting method,and then aggregates the indicator system using the WSM at different years.Next,grey numbers are used in representing a period of data for the dynamic indicators,and base on this the Grey Weighted Sum Model(GWSM)is proposed,however this model requires determining the whitenization coefficient for ranking the alternatives.To address this limitation,this further proposed the Integral Linear Programming with Grey Possibilities(ILP-GP)in ranking the alternatives.The ILP-GP approach begins with a pairwise comparison of the alternative on every indicator as grey numbers,the grey inferior or superior possibility degrees are determined,and the rankings of the alternatives are addressed as Integer Linear Programming problem.Finally,using the World Bank database in evaluation the business environment in Africa,the proposed WSM-TW,GWSM and ILP-GP evaluation methods are validated,sensitivity analysis is conducted to understand the factors that can impact the results,and a comparison of the results obtained from three methods are carried out,as well as African business environment are classified into three groups,providing investors decision support in determining where to invest in African countries.