An approach for analyzing foreign direct investment projects with application to China's Tumen River Area development
In this paper, we present a model for analyzing foreign direct investment opportunities by evaluating related projects. An integrated approach employing the analytic hierarchy process (AHP) and simulation is used to rank the projects. This methodology is applied to assess the industrial investment projects that were proposed in the 95 China's Tumen River Area International Investment and Business Forum funded by the United Nations Industrial Development Organization. Accordingly, the projects are classified into groups based on their potential to attract foreign investors. The results provide a scientific basis for formulating related decisions and policy recommendations regarding the proposed projects. Scope and purpose This article develops and implements a methodology for analyzing foreign direct investment opportunities. The related questions that arise are: What kinds of projects will attract foreign investments? How can one quantify the attraction for such investments and predict which projects might finally be funded? In what order should the selected projects be sequenced? In addressing such questions, a complicating factor is that not only should the economic evaluation of each individual project be considered, but this individual evaluation also needs to be coordinated with the comprehensive joint evaluation of all projects. We develop a comprehensive methodology for evaluating and ranking a set of proposed projects based on identifying and quantifying certain key economic target criteria, using the Analytic Hierarchy Process to determine relative weights for these criteria, and using simulation to update the economic factors in a sequential ranking and selection process. This methodology is applied to assess a set of 103 industrial investment projects that were proposed for the development of China's Tumen River Area in 1995.
foreign direct investment analytic hierarchy process (ahp) capital investment analysis