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Piotr Misztal
Uniwersytet Radomski; e-mail: p.misztal@urad.edu.pl
https://orcid.org/---
Vasili Kulakou
Uniwersytet Jana Kochanowskiego wKielcach; e-mail: vasili.kulakou@ujk.edu.pl
https://orcid.org/---
Investment Attractiveness Rankings as Tools
for Identication and Selection of Key Factors
Determining Investment Attractiveness of Countries
Rankingi atrakcyjności inwestycyjnej jako narzędzia identykacji iselekcji
kluczowych czynników determinujących atrakcyjność inwestycyjną krajów
Investment attractiveness rankings can provide valuable insights for investors, businesses, and
policy-makers. However, it is important to consider both the pros and cons associated with these
rankings. Investment attractiveness rankings oen employ standardized metrics and methodol-
ogies, providing aconsistent framework for evaluating countries. is can help investors make
more informed decisions by relying on objective and comparable data. It is important to view
investment attractiveness rankings as one tool among many for evaluating investment opportu-
nities. ey can provide useful insights but should be used in conjunction with other research
and due diligence to make well-informed investment decisions.
e main goal of the undertaken research is to present the essence and specicity of various
rankings of investment attractiveness of countries (regions) and to indicate the main advantages
and disadvantages of individual rankings used to assess the attractiveness of countries.
ree of the ve general techniques investigated are primarily concerned with nding hidden
threats, consequently overlooking the potential of the host region. At the same time, in some
circumstances, potential rewards can oset all present risks for the investor. is is acommon
occurrence in rapidly rising economies in transition. In turn, specialized procedures outperform
universal ones in terms of information coverage but fall short in terms of operational comp onent.
K: international competitiveness, attractiveness rankings, foreign direct investments
Rankingi atrakcyjności inwestycyjnej mogą dostarczyć cennych informacji inwestorom, przed-
siębiorstwom idecydentom. Ważne jest jednak, aby wziąć pod uwagę zarówno zalety, jak iwady
związane ztymi rankingami. Rankingi atrakcyjności inwestycyjnej często wykorzystują znormalizo-
wane wskaźniki imetodologie, zapewniając spójne ramy o ceny krajów. Może to pomóc inwestorom
wpodejmowaniu bardziej świadomych decyzji, opierając się na obiektywnych iwiarygodnych
danych. Rankingi atrakcyjności inwestycyjnej należy postrzegać jako jedno zwielu narzędzi do
oceny możliwości inwestycyjnych. Mogą one dostarczać przydatnych informacji, ale powinny być
https://doi.org/10.31743/ppe.17469
Przegląd Prawno-Ekonomiczny 1/2025
30
wykorzystywane zrozwagą wpołączeniu zinnymi badaniami wcelu podejmowania świadomych
decyzji inwestycyjnych.
Głównym celem podjętych badań jest przedstawienie istoty ispecyki różnych rankingów
atrakcyjności inwestycyjnej krajów (regionów) oraz wskazanie głównych zalet iwad poszczególnych
rankingów wykorzystywanych do oceny atrakcyjności krajów.
Trzy zpięciu badanych ogólnych technik polegają przede wszystkim na wyszukiwaniu ukry-
tych zagrożeń, wkonsekwencji pomijając potencjał danego regionu. Jednocześnie, wniektórych
przypadkach, potencjalne korzyści mogą zrównoważyć wszystkie obecne zagrożenia dla inwestora.
Jest to powszechne zjawisko wszybko rozwijających się gospodarkach wokresie przejściowym.
Procedury wysoce wyspecjalizowane przewyższają procedury uniwersalne pod względem zakresu
informacyjnego, ale nie spełniają swojej funkcji operacyjnej.
S : konkurencyjność międzynarodowa, rankingi atrakcyjności, bezpośrednie
inwestycje zagraniczne
e primary goal for any economic system, regardless of its scale, is to ensure
sustainable and progressive development. Achieving this requires the system’s
ability to attract investment resources, as investment attractiveness largely de-
termines the system’s competitiveness in dierent markets in terms of capital,
labor, and innovation (Misztal & Kulakou, ).
When deciding where to invest capital, it is critical for an investor to have as
complete and reliable information as possible about both the benets (growing
markets, cheap labor, infrastructure development, etc.) and potential risks
(economic, political, legal, etc.) that await him in the destination country. Only
with acomplete information picture based on both statistical indicators of
the country’s development and expert assessments can abalanced defensible
decision be made that reduces the possibility of inecient investment location.
As aresult, both internal and foreign investors must conduct athorough exam-
ination of the investment climate before making any nal decisions on capital
investment execution.
It should be noted here that the consumer of information on the results of
assessing the investment attractiveness of acountry (or aseparate region) is not
only the business community, but, and sometimes even to agreater extent, govern-
ment authorities at various levels. As arule, such assessments serve as avaluable
source of information about the most problematic issues in various spheres of
the state’s life that hinder its normal development. e availability of reliable and
timely information that reects reality adequately is the key to the formation of
1/2025 Przegląd Prawno-Ekonomiczny 31
asuccessful investment policy with clearly dened priorities, which allows attracting
investments in precisely those sectors that really need them.
Hence, the main goal of the research is to present the essence and specicity
of various rankings of investment attractiveness of countries (regions) and to
indicate the main advantages and disadvantages of individual rankings used
toassess the attractiveness of countries.
e investment climate is shaped by acomplex set of interrelated factors, and
investors consider acombination of dierent economic and non-economic deter-
minants when making decisions. Countries that create an environment of political
stability, economic growth, strong infrastructure, transparent regulations, and
open markets tend to be more attractive to both domestic and foreign investors.
Numerous attempts to identify the criteria for categorizing the premises that
lead to an increase in the company’s involvement in activities on international
markets are found in the literature on the issue, and these eorts are crucial for
determining the consequences that follow. In the literature on the topic, motiva-
tions, such as seeking resources, looking for markets, increasing the company’s
productivity, and gaining strategic assets and competencies, are most commonly
mentioned (Dunning & Lundan, ).
Bellak, Leibrecht and Damijan () show that ahigh corporate income
tax rate reduces the protability of foreign direct investment. Economically
developing countries are viewed as appealing destinations for FDI inows
due to their comparative advantages, which include low labor costs, compel-
ling pro-investment government policies, an abundance of raw materials, and
massive natural resources. Nonetheless, given their limited nancial resources
and the heavy pressure on the budget decit, it is fair for the governments of
these nations to levy high tax rates in order to provide enough budget revenues.
In today’s economy, tax competition among countries to attract foreign direct
investment is becoming aworldwide issue. Investors frequently examine tax
rates between nations with similar-sized and geographically distributed markets.
Wei () gathered data from forty-ve countries. e model was estimated
using the Tobit method. e study’s ndings revealed that corruption has aneg-
ative impact on foreign direct investment inows. Using panel and cross-sec-
tional data, Abed and Davoodi () explored the relationship between per
capita FDI ows in transition economies and levels of corruption. e ndings
Przegląd Prawno-Ekonomiczny 1/2025
indicate that nations with lower levels of corruption attract more foreign direct
investment (FDI). However, when an institutional reform control variable was
added to the model, the corruption variable lost signicance. is analysis thus
reveals an important conclusion: institutional change, rather than corruption
reduction, is more signicant for attracting foreign direct investment(FDI)
inows to diverse countries.
Economou, Hassapis, Philippas and Tsionas () investigated FDI inow
drivers in OECD and developing (non-OECD) countries from to ,
employing both classic xed eects and adynamic panel approach. e study’s
most substantial nding was that lagged FDI, market size, gross capital creation,
and corporation taxes all had asignicant impact on FDI inows in OECD nations.
Kumari and Sharma () conducted research on the impact of the size of
the host country’s market on foreign direct investment ows. ese studies, while
not conclusive, provide evidence for the macroeconomic factors inuencing
foreign direct investment inows in both industrialized and developing coun-
tries. According to studies on the impact of eciency on FDI ows, the degree
of human capital development and associated costs has asignicant impact on
the country’s FDI intake. According to Braconier, Norbäck and Urban (),
lower labor costs improve acountry’s ability to attract foreign direct investment.
Human capital is asignicant driver of foreign direct investment ows.
Zheng () examined and analyzed the determinants of foreign direct
investment inows in India and China taking into account both host and home
country characteristics. His research found that labor costs, market growth,
country political risk, imports, and policy liberalization were the most important
drivers for both countries. Cultural and geographical distance considerations
were crucial for Indian FDI, but market size, exports, and borrowing costs were
key for Chinese FDI.
Kim and Yang () used the panel quantile regression model to examine
the factors that inuenced FDI inows to Korea between and . ey
discovered that GDP, employment, and human resource education levels in
the host country were signicant predictors of FDI inows only when the inow
was modest. However, corruption and anti-environmental investment levels
were statistically signicant predictors of middle- and high-level FDI inows.
Research conducted by Dellis, Sondermann and Vansteenkiste () indicates
that basic rights, such as the rule of law, property rights, or regulatory eciency,
are important for FDI decisions, but well-functioning labor and product markets
are also important factors for foreign investors. In addition, such determinants
of FDI inows as labor costs, the size of the target market, the trade openness
1/2025 Przegląd Prawno-Ekonomiczny 33
of the recipient country, and its propensity to tax economic entities are equally
important for potential investors.
Moreover, according to the ndings of astudy done by Lee, Kang and Lee
() across nations between and , developing economies rely
heavily on economic indicators to draw foreign direct investment. Additionally,
it is demonstrated that social indicators have acomparatively greater impact
on FDI inows in industrialized economies than economic indicators. Lastly,
in both established and developing economies, there is aweak and statistically
insignicant correlation between institutional variables and FDI inows.
Various methodologies have been developed to analyze the investment climate
(attractiveness) of countries and areas based on research undertaken by rating
agencies, business schools, and scientic and research institutions. e number
and composition of the examined indicators vary between techniques, as do
the methods used to estimate their qualitative and quantitative features, evalua-
tion ranges, and so on. It should be noted that the sets of elements that comprise
the investment climate are oen arbitrary and, in some cases, subjective.
e analysis will consist of two stages:
.
Initial (general) analysis: its main task is the general assessment and
comparison of the studied methodologies;
. Component (detailed) analysis: it aims to select the most universal, sig-
nicant and frequently used factors in assessing the investment climate.
Taking into account the fact that in the last three decades anumber ofap-
proaches have been developed to assess the investment attractiveness of
post-Soviet economies the rst part of the analysis will consist of two sub-stages.
At the rst sub-stage, it is supposed to examine the most common universal
methodologies in international practice, such as:
−Harvard Business School methodology;
−“Euromoney” magazine methodology;
−BERI Index;
−Forbes magazine methodology;
−e Venture Capital and Private Equity Country Attractiveness Index.
In addition, the World Bank group’s actions for the Doing Business and
Business Enabling Environment projects will be reviewed. Previous research
has developed aclassication of the factors inuencing acountry’s (region’s)
Przegląd Prawno-Ekonomiczny 1/2025
34
investment climate into seven major groups: economic and nancial, political,
legal, geographic, socio-demographic, technological, and infrastructural (Kulak-
ou, ). is classication will serve as the basis for adetailed investigation of
the category under consideration. is will enable us to discover not just specic
factors, but also broad themes that experts emphasize when conducting com-
parative assessments of investment attractiveness (Misztal & Kulakou, ).
It should be noted that the techniques of grouping specic factors within
the frameworks of various methodologies varied slightly from those given by
us. For example, Euromoney magazine’s methodology classies so infrastructure
components (development of the social environment, medicine, and so on) as
structural hazards, but we recommend classifying them as socio-demographic
factors. Within the framework of this study, in order to unify the analysis, we
will follow the author’s approach to determinant grouping.
ere are numerous techniques to analyze and categorize methodologies
for assessing investment climate (attractiveness) in the scientic literature, de-
pending on the criteria used. e most prevalent criteria include the following:
.
e approaches behind the evaluation (risk, factorial, integral-factoral,etc.;
Narolina, ; Sheveleva & Nacheva, ).
.
Assessment objectives (identifying dangers or determining the re-
gion’s potential, identifying investment-attractive places, etc.; Yakushev
&Mazilov,).
. Balanced qualitative and quantitative assessments (Khusnullin, ).
. e format in which the nal results are presented (rating scale, matrix,
general quantitative assessment, etc.; Vakulich & Kliuchnyk, ).
Furthermore, during the analysis, researchers oen concentrate on the ap-
proaches’ comparative characteristics, the assessment of their advantages and
disadvantages, and the set of estimated indicators (Alexandrova, ). While
appreciating the importance of all of the methodologies explored, it is worth
noting that the bulk of them disregard certain critical criteria for methodology
analysis and classication. In our opinion, such factors include the approach’s
intricacy (i.e., applicability) and information coverage (i.e., how comprehensively
the methodology depicts present opportunities and threats).
As aresult, aer researching numerous ways to comparative analysis and
methodology categorization for analyzing the investment climate, we deter-
mined that acomparative analysis of the techniques would be conducted within
the context of our study using four primary criteria. e classication will be
based on the Applicability matrix that we built.
1/2025 Przegląd Prawno-Ekonomiczny
For acomparative analysis of investment climate assessment methodologies,
we selected the following key characteristics:
−
information coverage– the number of analyzed determinants and groups
(out of selected groups);
−
ease of use– the complexity of the analysis algorithm and whether special
knowledge and skills are required for its implementation;
−
the range of approaches being used– i.e. on the basis of what kind of
assessment is carried out: are these only expert assessments, or is there
aquantitative analysis, integral indicators, etc.;
−
availability of information– how easy it is to access the information
needed for analysis.
Each criterion will be evaluated on afour-point scale:
−“-”– negative assessment,
−“-/+”– more negative assessment with apositive component,
−“+/-”– more positive assessment with anegative component,
−“+”– positive assessment.
In essence, these criteria separate two primary components: informational
(information coverage) and operational (breadth of approaches employed, ease
of use, and ability to retrieve critical information). To provide amore visual
depiction of the analysis results, we developed amatrix of ways for measuring
the investment climate (attractiveness) (AM). It is comprised of four group quad-
rants, each of which is further divided into four quadrants for ease of assessment.
us, its overall dimensions are x. e matrix’s horizontal axis represents
the level of information coverage (information component), while the vertical
axis represents the average value of estimates of the breadth of the approaches
utilized, ease of use, and information availability (operational component).
e assessment of each component is given on afour-point scale, by analogy
with the system used in the previous step:
−“-”– point,
−“-/+”– points,
−“+/-”– points,
−“+”– points.
Fractional estimates are also possible, such as ., ., etc. Points determine
which of the sixteen squares the technique falls into (an intermediate position
is also possible in the case of fractional ratings).
Group quadrants have the following aliases:
− aliens– low information coverage and complexity of use (ratings: ;, ;,
;, ;);
Przegląd Prawno-Ekonomiczny 1/2025
36
− guides for beginners– low information coverage but easy to use (ratings:
;, ;, ;, ;);
− macadamia nuts– hard to crack, but very informative (ratings: ;, ;,
;, ;);
−stars– very informative and easy to use (ratings: ;, ;, ;, ;).
Grading will be based on acritical analysis of the information and expert opinions
of the authors of the research.
e Harvard Business School technique is based on peer reviews. It focuses on
determining the level of risk to the investor in the host region. is technique
assesses the following: legislative circumstances for international and domestic
investors; the feasibility of capital export; the state of the national curren-
cy; the political scenario; the ination rate; the ability to use national capital.
ere are eight main determinants in total, each with aset number of points.
e end result is acomplete measure of the risk of investing cash in the country’s
economy. Its value can range from to points: the higher this indication,
i.e. the closer its value is to points, the lower the degree of risk and vice versa
(Kosobutskaya, ).
e quantity of indicators assessed, as well as the fact that the analysis is
conducted solely by experts, indicate that this is avery narrow approach with
ahigh level of subjectivity in the assessment. is approach has the advantage
of being relatively simple. Furthermore, despite the fact that qualitative analysis
requires specialized knowledge and abilities, gathering the necessary data is quite
simple. e majority of the relevant data is available to the public.
Euromoney magazine’s methodology broadens the number of indicators evaluated
and incorporates aquantitative indicator of sovereign debt into the Euromoney
Country Risk (ECR) expert assessments.
e Euromoney Country Risk assesses acountry’s investment risk, such
as the risk of bond default, the risk of direct investment loss, the risk to global
business relations, and so on, using aqualitative model that seeks expert opinion
on risk variables within acountry ( per cent weighting) and combines it with
abasic quantitative value ( per cent weighting). To calculate the overall Eu-
romoney Country Risk score, ve categories are weighted. e four qualitative
1/2025 Przegląd Prawno-Ekonomiczny 37
expert assessments are: political risk ( per cent weighted), economic risk
(per cent), structural risk ( per cent), and access to foreign capital markets
( percent). e numeric gure is derived from sovereign debt indicators
(per cent). When applying political, economic, and structural assessments to
apoint scale for the qualitative average only (rather than the full Euromoney
Country Risk score), the following weighting is used: political per cent, eco-
nomic per cent, and structural per cent (Euromoney, ).
economic risk: participants rank each country about which they know from to
across six sub-factors to get ascore out of . e economic risk categories
are as follows: bank stability/risk, GNP outlook, unemployment rate, government
nances, and monetary policy/currency stability. Political risk: participants
rate each country about which they know from to across ve sub-factors
to get ascore out of . e political risk categories are as follows: corruption;
government non-payments/non-repatriation; government stability; information
access/transparency; institutional risk; and regulatory and policy environment.
Structural risk: participants rank each country for which they have
expertise on a scale of 0 to 10 across four sub-factors, yielding a score of
100. The structural risk categories are as follows: demography, physical
infrastructure, labour market/industrial relations, and soft infrastructure.
Access to international capital markets: participants rate each country’s
accessibility to international markets on a scale of 0 to 10 (0 = no access,
10 = full access). These scores are averaged and weighted at 10 per cent
(Soina-Kutishcheva, Yarkova, Luneva, Piskunova & Naplekova, 2020).
e quantitative score factors – debt indicators are calculated using the follow-
ing ratios from the World Bank’s Global Development Finance gures: total
debt stocks to GNP (A), debt service to exports (B); current account balance
to GNP(C). Developing countries which do not report complete debt data get
ascore of zero.
e combined Euromoney Country Risk score ranges from qa to and
represents the actual sum of expert evaluations of specic variables derived
through calculation and analysis. e technique for generating the rating, as
well as the composition of the evaluation indicators, are continuously updated
Przegląd Prawno-Ekonomiczny 1/2025
38
to reect changes in the worldwide market scenario. is is done to increase
the accuracy of the assessment and the appropriateness of the results produced.
However, it should be highlighted that, while the number of evaluated indi-
cators has increased in comparison to the HBS approach, their collection is still
insucient to account for all of the variables considered by investors. Adding
aquantiable indicator of national debt lessens the level of subjectivity in esti-
mates to some extent, but we believe it remains signicant. e algorithm and
the set of indicators assume the presence of specialized knowledge. e specicity
of anumber of criteria being analyzed limits access to relevant information as
well as independent application of the approach.
Forbes magazine’s methodology includes selecting parameters that reect various
aspects of the region’s economic life, as well as compiling arating of regions that
clearly shows each’s position relative to others in terms of investor attractiveness
(Egorova, ).
is methodology includes six groups of factors that describe many aspects
of economic life: the economic situation (crisis resistance), socio-demographic
features, infrastructure, population purchasing power, personal comfort, and
business climate. Each parameter is assigned ascore, with higher scores in-
dicating better results. e summary indicator is aweighted average value of
the groups. e qualities of the business atmosphere have the highest weight
among the groups, whereas indications of personal comfort have the lowest
weight (Bulatova, ).
In terms of anumber of characteristics, this technique differs from
the approaches outlined previously. The variations are mostly in the in-
frastructural component of the investment climate (including the cost of
residential and industrial real estate, as well as the cost of connecting to
electricity grids), with the development of small businesses being taken into
account. Thisstrategy, like the preceding ones, is based mostly on expert
opinions. This allows us to discuss the subjective nature of factor selection
and assessment. The range of assessed indicators suggests poor information
coverage. Despite the minimal number of indicators under examination,
the algorithm of this methodology is sophisticated and time-consuming.
Also, according to some experts, there is no objective criterion of reliability
in this technique (Bulatova, ).
1/2025 Przegląd Prawno-Ekonomiczny 39
Despite the labor intensity of the process, the Forbes methodology has
several advantages, including practical feasibility, relative accessibility for in-
vestors, international recognition, and the ranking of indicators based on their
signicance to the nal result, which allows for more accurate consideration of
capital owners’ interests. It should also be noted that this strategy is recommended
for usage when an investor must select between numerous priority possibilities,
as it requires completing acomparison examination.
Business Environment Risk Intelligence employs the BERI index, which
assesses the overall quality of the country’s business climate. This indicator
consists of three components: the Operations Risk Index (ORI), the Political
Risk Index (PRI), and the Remittance and Repatriation Factor. The method-
ology allows for an expert assessment of basic business hazards (Kudasov
& Timokhina, ).
e indicator values are assigned using an evaluation scale ranging from
(unacceptable) to (extremely favorable). Each indicator has aspecic
weight in the nal conclusion. e weighted score is calculated by multiply-
ing the points on the rating scale by the corresponding weight. e Business
Environment Risk Index is calculated by summing the weighted ratings. One
of the primary benets of this method is its adaptability. e computation
algorithm itself is rather straightforward. It also gives aranking of indications
based on their value to the end result. At the same time, doing aqualitative
assessment necessitates awide range of specialized knowledge. Obtaining
all the information necessary for conducting afull-edged analysis (on
the conditions for interaction between government and business, the degree
of bureaucratization, etc.) in the conditions of countries with transitive
economies can be associated with certain diculties, and in some cases it is
simply impossible.
e index assesses countries’ attractiveness to investors in the venture capital
(VC) and private equity (PE) asset classes. It is adynamic valuation system that
adjusts based on market conditions. e authors of this technique identify six
major factors, giving aclear sense of the structure of the nal index: Economic
Przegląd Prawno-Ekonomiczny 1/2025
40
Activity; Depth of Capital Market; Taxation; Investor Protection and Corporate
Governance; Human and Social Environment; Entrepreneurial Culture and
Deal Opportunities (Venture Capital and Private Equity Country Attractiveness
Index, ).
ese six main drivers cannot be measured individually. eir evaluation
is based on sub-criteria that describe the level of development of aspecic
driver. e sub-criteria might also be structured in two levels. us, the index
is built on three tiers of indicators. e assessed criteria are dynamic and
might vary in response to the market’s structure and needs. In the context of
this study, as indicators included in our nal analysis within the framework of
the Venture Capital and Private Equity Country Attractiveness Index assess-
ment methodology, we will primarily consider the second-level sub-criteria,
with the exception of cases where the third-level sub-criteria clearly correlate
with the groups of determinants we identied previously. erefore, the main
drivers will include:
−
Economic Activity: the size of the economy (Total Economic Size),
i.e. the volume of GDP; expected GDP growth; unemployment rate;
−
Depth of Capital Market: Size of the Stock Market, Stock Market Liquidity
(Trading Volume), IPOs and Public Issuing Activity, M&AMarket Activity,
Debt and Credit Market, Bank Non-Performing Loans to Total Gross Loans;
− Taxation: the level of taxation and non-tax payments (Entrepreneur Tax
Inc. and Administrative Burdens);
−
Investor Protection and Corporate: Quality of Corporate Governance;
Security of Property Rights; Quality of Legal Enforcement, specically,
the independence of judicial power, the eectiveness of the legal frame-
work, the integrity of the legal system, the operation of the rule of law,
the quality of legal regulation;
− Human and Social Environment: the level of education of the population
and the quality of human capital, the state of the labor market, the level
of corruption;
− Entrepreneurial Culture and Deal Opportunities: the level of innovation
development; the number of published scientic and technical articles;
ease of starting and running abusiness; ease of closing abusiness; cor-
porate R&D.
Based on the findings, we can conclude that when determining invest-
ment attractiveness, the Venture Capital and Private Equity Country At-
tractiveness Index professionals use sub-criteria. The overall number of
variables analyzed, including the fundamental (third) level, is different
1/2025 Przegląd Prawno-Ekonomiczny 41
indicators of the country’s socioeconomic progress. Given the method-
ology’s details (attractiveness for venture capital and direct investment),
the essential factors here are capital market depth, investor protection, and
corporate governance.
Despite its specialized nature, this strategy covers more information than
the previously stated methods. e analytical algorithm is highly sophisticated,
requiring specialized knowledge in avariety of domains. e membership of
the evaluation team has asignicant impact on the quality of the outcomes.
e approach requires access to prole information on the capital market, which
might be problematic due to the underdevelopment of such markets in many
transitional economies.
Table shows the comparative characteristics of the researched approaches for
measuring the investment climate using the previously established analysis criteria.
Table . Summary table of comparative characteristics of universal methodologies for assessing
the investment climate of countries (regions)
Methodology Information
coverage
Availability of
information
Variety of
the approaches
in use
Ease of use
HBS - +/- - +/-
Euromoney -/+ -/+ -/+ -
Forbes -/+ -/+ - -/+
BERI -/+ +/- - +/-
VCPEI -/+ -/+ -/+ -
Source: own preparation.
e data in Table allows us to calculate the indicators required to create the ap-
plicability matrix (Table ). Figure below shows amatrix showing the applicability
of approaches for assessing the investment climate.
Table . Initial data for compiling the applicability matrix
Methodology Informational component Operational component
HBS 1 2,3 (5)
Euromoney 2 1,7
Forbes 2 1,7
BERI 2 2,3
VCPEI 2,3 1,7
Source: own preparation.
Przegląd Prawno-Ekonomiczny 1/2025
Figure. e applicability matrix for the ve most common universal approaches for assessing
nations’ investment climates
Source: own preparation.
As we can see, the strategies examined are usually associated with the Al-
iens group, to some extent. is group is distinguished by alack of information
coverage paired with the diculty of the assessment. is necessitates awide
range of specialized expertise, the engagement of external experts, and potential
challenges in gathering the data required for analysis.
e approach developed by Harvard Business School, along with Aliens, is
partly included in the Guides for beginners group. e methodologies under
this alias are easy to use, but they give only abasic idea of the investment at-
tractiveness of the country (region).
Aer reviewing the empirical literature on the drivers of FDI, it becomes clear that there
is no agreement across empirical studies on the key determinants of FDI because dierent
types of FDI are inuenced by various reasons. As aresult, experts and researchers are
at odds on the determinants of foreign direct investment. is is owing to signicant
dierences in the views, methodology, and analytical tools used in investigations.
1/2025 Przegląd Prawno-Ekonomiczny 43
e conducted analysis allowed us to identify anumber of characteristic
features common to universal methods for assessing the investment climate
(attractiveness).
First and foremost, it is important to observe the relatively low amount of infor-
mation coverage. Climate and geographic ( out of ) and technological ( out of )
aspects should be identied as the least accounted for. e VCPEI technique deserves its
own discussion. Despite the possibility of universal application, this strategy might be
considered semi-specialized because it focuses on nancial markets. It provides aslightly
higher level of information coverage, but not in areas crucial to transition economies.
Regardless of whether some of the approaches employ statistical comparisons
in their analyses, all of them, without exception, are based on expert assessments.
As aresult, the professionalism of the chosen team of assessors determines
the quality and reliability of the analysis.
e HBS and BERI approaches are mostly based on data that are easily
obtained (GDP, ination rate, currency stability, etc.). At the same time, Eu-
romoney, Forbes, and VCPEI analyze anumber of specialist indicators (labor
market conditions, banking system stability, stock market liquidity), necessitating
further research and complicating access to this information. Asimilar situation
exists with regard to analysis algorithms. e HBS and BERI methodologies are
simpler to implement than the other three approaches.
It should also be noted that three of the ve approaches investigated are pri-
marily concerned with nding hidden hazards, hence overlooking the potential
of the host region. At the same time, in some circumstances, potential rewards
can oset all present risks for the investor. is is acommon occurrence in
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