Ease of doing business index indicator weighting by applying quantitative methods

Abstract

Businesses in XXI have reached a point where any means in production or service supply process are taken to gain higher competitiveness. But competitive advantages such as labor costs, usage of natural resources or knowledge level are strongly influenced by local governments. It is common to name such conditions for business in general term – business environment, or in other sources – ease of doing business. In order to control or interfere more closely with any phenomenon, at first one has to have an instrument and means to measure it. The article discusses different methods of competitiveness level assessment that are used in theory and practice globally. Unsolved and problematic part of such methods is the indicator weighting phase. Since all business environment assessment models use either equal weighting or qualitative weighting methods, naturally they are criticized. The purpose of this article is to analyze possible link between prosperity (quality of life) and ease of doing business, and on the base of this link propose an idea of weighting indicators of business environment by quantitative methods. Also generalized model of quantitative indicator weighting in business environment assessment is presented. This quantitative method of weighting indicators is adaptable E-business environment assessment as well.