Application of hierarchical agglomerative clustering with the TOPSIS method for evaluating the business environment in European countries during the post-pandemic period

Abstract

The economic growth of any country relies significantly on its business environment and entrepreneurship, particularly after overcoming a crisis such as the COVID-19 pandemic. This research paper employs macroeconomic indicators to compare the business environment across European Union (EU) countries, integrating cluster analysis with the TOPSIS method. The results revealed distinct clusters in the European business landscape, highlighting Germany as having the most favourable environment due to regulatory reductions and innovation promotion. France and Italy represent another cluster with advanced industrial status, while Hungary stands out with competitiveness shortcomings, suggesting the overall business climate may not be conducive for enterprises.