EVALUATION OF THE FDI ATTRACTIVENESS OF THE EUROPEAN COUNTRIES USING PROMETHEE METHOD

Abstract

Foreign direct investment (FDI) could be a significant source for performance improvements of a company because aside capital, they bring knowledge, skills, technologies, as well as contacts and customers which they had in the home country. Foreign investors are motivated by realization of longterm increasing profits through a company in which they invest. Since profit depends on revenue and costs, the motives of investors can be looked for in increasing revenue (market expansion), in reducing costs (lower cost of resources), or in the simultaneous effect on revenue and costs through increased efficiency. This paper analyzes six Southeast European countries (SEE-6) as well as the EU-27 with the aim of assessing the attractiveness of destination. Using the PROMETHEE (Preference Ranking Organization Method for Enrichment Evaluations) multi-criteria decision making method, authors show advantages and disadvantages of each country, creating the basis for the creation and redefinition of macroeconomic policies to address them.

Keywords

• FDI
• Multi-criteria investment decisions
• PROMETHEE method
• European countries