The International Investment Index Report IIRC, Wuhan University

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1 The International Investment Index Report -14, Wuhan University

2 The International Investment Index Report for to 14 Make international investment simple Introduction International investment continuously flourishes within new century, how to make scientific decision on international investment becomes more important for entrepreneurs, governments and scholars. Here we release the report, International Investment Index Report for to 14. This report is issued by International Research Center of Wuhan University. It selects the research samples from 8 countries and territories, which include 31 in Asia, 28 in Europe, 12 in North America, 9 in South America, 24 in Africa, 4 in Oceania; also 29 developed countries and 79 developing countries (including Chinese Hong Kong). It is the weather that analyzes and forecasts the global international investment opportunities and trends, and also helps the international organizations or international investors minimize the risk on international investment. International investment needs precise decision-making but in fact contains man-made leading factors. In order to minimize the subjective factors, the International Investment Index Report for to 14 has done lots of contributions in the aspect of objective and neutrality. This research bases on attribute of international investment and starts from the point of volatility to quantify and standardize the index system by big data. It exactly indicates our philosophy and purpose make international investment simple. International Investment Index (II index) is a performance indicator for international investment analysis and prediction on multidimensional perspectives by big data. International Investment Index (II index) in this report includes 11 first level catalogues; 9 indicators of fourth level catalogues that cover politics, social environment, natural environment, economy, finance, trade, investment, market, innovation, infrastructure, force majeure factors, etc. International Investment Index (II index) takes basic theories of Economics and Investment, which do modeling from the two aspects of international investment returns and risks to evaluate the international investment performance, and use Monte Carlo Simulation and GBM that deduce volatility of international investment to be positive correlation with investment return and the market trend, through the PCA and Probit-logit methods to calculate the mapping factor of weight and probability. Adopting innovatively data modeling to solve the difficulties on subjective scoring or qualitative variables, this report realizes a comprehensive and quantitative analysis by big data to reach the objective and neutral empirical conclusion. All data sources come from the World Bank, some international key authorities and each national government in order to ensure its authority and accuracy. The International Investment Index Report for to 14 is led by Professor Chen Hong in Wuhan University, with other key cooperation and dedication members including Yu Pei, Yang Chengyu, Ma Yongjian, Wei Xin, Cao Hongtao, Xu Rong, Zhu Pengshen, Hou Baocai, etc. 1

3 Part 1 8 Countries & Territories II Index for to 14 Figure 1 The Distribution of 8 Countries and Territories II Index 2

4 Table 1 International Investment Index Rankings for to 14 Rank Country/ Index Rank Country/ Index Rank Country/ Index Rank Country/ Index Territory Territory Territory Territory 1 China Belgium 1.93 Papua New Cuba 2.84 Guinea 2 South Africa Australia.77 6 Arab Emirates Luxembourg Argentina Sweden. 7 Bolivia Uruguay Russia Bangladesh Iran Bahamas Indonesia Malaysia Peru Myanmar Italy Tanzania Holland Uzbekistan Brazil Mongolia Morocco Croatia Germany Tunisia Norway Lithuania Thailand Denmark Chile Switzerland.7 Cambodia Philippines Costa Rica Libya Vietnam Singapore Guatemala Kazakhstan France Greece Spain Madagascar UK Jordan Venezuela Hungary Republic of Cyprus Hong Kong, New Zealand 1.84 Korea China 1 Japan Turkey Czech Mauritania Egypt Nigeria Sudan Zambia Colombia Namibia Saudi Arabia Yemen India Pakistan Bulgaria Romania Austria Poland Algeria Monaco US Canada Honduras Jamaica Panama Senegal Angola Zimbabwe Sri Lanka Ecuador Tajikistan Israel Mexico.33 Nicaragua Portugal Maldives Abyssinia Ghana Serbia Fiji.99 2 Finland Ireland Cameroon Iceland Georgia Mozambique Congo Cayman Islands 3.8 Democratic 27 Oman Kenya Mali Somalia.11 ems.whu.edu.c 3

5 The 8 countries and territories classify as follows: 31 in Asia, 28 in Europe, 12 in North America, 9 in South America, 24 in Africa, 4 in Oceania; also 29 developed countries and 79 developing countries (including Chinese Hong Kong). According to the former countries and territories ranked by the International Investment Index, the most notable feature is that the BRICS, including China, South Africa, Russia, Brazil and India are all among the Top, where China and South Africa are the Top 2. Furthermore, the mean of 8 II indexes is 38.2, above which there are 4 countries and territories. From the geographical distribution and development level of these economies we can see that on the one hand, Asia countries and territories have the highest proportion of its own total samples, followed by Europe, Africa, South America, North America and Oceania. On the other hand, the developed countries that above the average II Index have a relative higher proportion of its own total samples than that of developing countries, reaching more than 6 percent, see Figure 2. Figure 2 Distribution characteristics of the countries and territories above the average II Index Asia Europe North America South America Africa Oceania Developed country Developing country Note: The horizontal axis represents the categories classified by geographical distribution and development level. The vertical axis represents the proportion of countries and territories in different categories which above the average II Index, the unit is %. 4

6 Figure 3 Top countries & territories of different continents ranked by the II Index Asia Europe North America South America Africa Oceania China Russia United States Argentina South Africa Australia Indonesia Italy Panama Brazil Egypt Papua New Guinea Thailand Germany Mexico Colombia Abyssinia New Zealand Cambodia France Canada Ecuador Tanzania Fiji Vietnam United Kingdom Nicaragua Bolivia Tunisia Figure 4 Top countries & territories of developed countries and developing countries ranked by the II Index Developed country Developing country Belgium Finland United States Austria Japan Egypt Vietnam Cambodia Thailand Brazil Republic of Korea Indonesia United Kingdom France Russia Argentina Germany Italy South Africa China

7 Part 2 Modules contribution degrees of 8 countries & territories Chapter 1 Politics Module Some key indicators Unit Military expenditure million US$ Armed forces personnel %,percentage of total labor force Corruption Perceptions Index - Figure 1.1 Map of politics module contribution degrees of 8 countries & territories Descriptive statistics: Maximum.32 Mean.24 Median 4.43 Minimum The politics module contribution degrees are between and.32, with mean.24 and median 4.43, which indicating that political factors have no significant contribution to the II Index of most countries and territories. From Figure 1.2, Figure 1.3 and Figure 1.4 we can see that, relatively speaking, political factors have a greater contribution to the II Index of African countries and developing countries. 6

8 Figure Top countries & territories ranked by politics module contribution degrees Libya Iceland Yemen Zambia Mauritania Luxembourg Honduras Cameroon Switzerland Saudi Arabia Figure 1.3 Top countries & territories of different continents ranked by politics module contribution degrees 1 Asia Europe North America South America Africa Oceania Yemen Iceland Honduras Ecuador Libya New Zealand Saudi Arabia Luxembourg Jamaica Peru Zambia Australia Arab Emirates Switzerland Cuba Colombia Mauritania Papua New Guinea Singapore Spain Mexico Brazil Cameroon Fiji Turkey Russia Guatemala Uruguay Mali 7

9 Figure 1.4 Top countries & territories of developed countries and developing countries ranked by politics module contribution degrees Developed country Developing country Greece France Cyprus Australia New Zealand Singapore Spain Switzerland Luxembourg Iceland Ecuador Morocco Mali Saudi Arabia Cameroon Honduras Mauritania Zambia Yemen Libya

10 Chapter 2 Macroeconomic Module Some key indicators Unit Total reserves million US$ Unemployment rate % PPI % Total retail sales million US$ Manufacturing PMI % GDP per capita US$ Figure 2.1 Map of macroeconomic module contribution degrees of 8 countries & territories Descriptive statistics: Maximum Mean Median Minimum The macroeconomic module contribution degrees are between and 42.42, with mean and median 11.66, which indicating that macroeconomic factors have a significant contribution to the II Index of most countries and territories. From Figure 2.2, Figure 2.3 and Figure 2.4 we can see that macroeconomic factors have a greater contribution to the II Index of Asian and European countries, while having no significant difference between developed countries and developing countries. 9

11 Figure Top countries & territories ranked by macroeconomic module contribution degrees Kazakhstan New Zealand Poland Luxembourg Philippines Saudi Arabia Vietnam Russia United Kingdom Germany Figure 2.3 Top countries & territories of different continents ranked by macroeconomic module contribution degrees 4 3 Asia Europe North America South America Africa Oceania Kazakhstan Poland United States Argentina Namibia New Zealand Philippines Luxembourg Honduras Uruguay South Africa Fiji Saudi Arabia Russia Mexico Brazil Abyssinia Australia Vietnam United Kingdom Panama Peru Senegal Papua New Guinea Jordan Germany Bahamas Bolivia Congo Democratic

12 Figure 2.4 Top countries & territories of developed countries and developing countries ranked by macroeconomic module contribution degrees Developed country Developing country Denmark Spain United States Austria Norway Singapore Germany United Kingdom Luxembourg New Zealand South Africa Namibia Oman Jordan Russia Vietnam Saudi Arabia Philippines Poland Kazakhstan

13 Chapter 3 Trade Module Some key indicators Unit Exports million US$ Imports million US$ Export value index = Import value index = Trade market share % Tariff rate % Figure 3.1 Map of trade module contribution degrees of 8 countries & territories Descriptive statistics: Maximum Mean 8.64 Median. Minimum developing countries. The Trade module contribution degrees are between and 43.29, with mean 8.64 and median., which indicating that trade factors have less significant contribution to the II Index of most countries and territories. From Figure 3.2, Figure 3.3 and Figure 3.4 we can see that, relatively speaking, trade factors do have a greater contribution to the II Index of African countries and 12

14 Figure Top countries & territories ranked by trade module contribution degrees Lithuania Croatia Zimbabwe Algeria Chile Mozambique Nicaragua Namibia Georgia Tanzania Figure 3.3 Top countries & territories of different continents ranked by trade module contribution degrees 4 3 Asia Europe North America South America Africa Oceania Georgia Lithuania Nicaragua Chile Zimbabwe Papua New Guinea Hong Kong Croatia Panama Peru Algeria Australia Oman Belgium Mexico Colombia Mozambique Fiji Cambodia Hungary Cayman Islands Venezuela Namibia New Zealand Thailand Portugal Canada Brazil Tanzania 13

15 Figure 3.4 Top countries & territories of developed countries and developing countries ranked by trade module contribution degrees Developed country Developing country Austria Greece Czech Sweden Ireland Italy Portugal Belgium Republic of Korea Hong Kong Tanzania Georgia Namibia Nicaragua Mozambique Chile Algeria Zimbabwe Croatia Lithuania

16 Chapter 4 Finance Stability Module Some key indicators Unit Effective exchange rate = Stock index futures closing price Treasury yield % money supply M2 million US$ Stocks traded, total value million US$ Bank nonperforming loans to total gross loans % Figure 4.1 Map of finance stability module contribution degrees of 8 countries & territories Descriptive statistics: Maximum Mean Median Minimum The Finance Stability module contribution degrees are between and 38.91, with mean and median 12.7, which indicating that these factors have very significant contribution to the II Index of most countries and territories. From Figure 4.2, Figure 4.3 and Figure 4.4 we can see that, relatively speaking, financial factors do have a greater contribution to the II Index of Asian countries, while having no significant difference between developed countries and developing countries. 1

17 Figure Top countries & territories ranked by finance stability module contribution degrees Israel Jamaica Iran Pakistan Holland Cyprus Kenya Finland United States India Figure 4.3 Top countries & territories of different continents ranked by finance stability module contribution degrees 4 3 Asia Europe North America South America Africa Oceania Israel Holland Jamaica Ecuador Kenya Australia Iran Cyprus United States Colombia Tunisia Fiji Pakistan Finland Cayman Islands Brazil Algeria New Zealand India Greece Panama Argentina Congo Democratic Papua New Guinea Republic of Korea Monaco Guatemala Bolivia South Africa 16

18 Figure 4.4 Top countries & territories of developed countries and developing countries ranked by finance stability module contribution degrees Developed country Developing country France Australia Japan Republic of Korea Greece United States Finland Cyprus Holland Israel Monaco Panama Tunisia Cayman Islands Ecuador India Kenya Pakistan Iran Jamaica

19 Chapter Investment Module Some key indicators Unit Domestic credit provided by financial sector % of GDP Investment return rate % Loan scale by financial sector million US$ External debt stocks, total million US$ Government debt ratios % FDI million US$ Figure.1 Map of investment module contribution degrees of 8 countries & territories Descriptive statistics: Maximum 24.6 The Investment module contribution degrees are between and 24.6, with mean 8.36 and median 8.39, which indicating that Mean 8.36 these factors have more significant contribution to the II Index of Median 8.39 most countries and territories. From Figure.2, Figure.3 and Figure.4 we can see that, relatively speaking, investment factors Minimum do have a greater contribution to the II Index of Asian countries, but other continents have no significant difference except Oceania. 18

20 Figure Top countries & territories ranked by investment module contribution degrees Venezuela Japan Angola Romania Nicaragua Cayman Islands Indonesia Morocco China Italy Figure.3 Top countries & territories of different continents ranked by investment module contribution degrees Asia Europe North America South America Africa Oceania Japan Romania Nicaragua Venezuela Angola Papua New Guinea Indonesia Italy Cayman Islands Brazil Morocco New Zealand China Ireland Jamaica Ecuador Zambia Australia Republic of Korea Czech Costa Rica Peru Tunisia Fiji Malaysia Hungary Guatemala Argentina Madagascar 19

21 Figure.4 Top countries & territories of developed countries and developing countries ranked by investment module contribution degrees Developed country Developing country Hong Kong Spain Switzerland France Singapore Czech Ireland Republic of Korea Italy Japan Zambia Brazil China Morocco Indonesia Cayman Islands Nicaragua Romania Angola Venezuela

22 Chapter 6 Innovation Module Some key indicators Unit Logistics cost index % Citizen average wage US$, month Total amount of natural resource rent %, of GDP Patent, residents unit Total trademark applications unit R&D expenditure %, of GDP Figure 6.1 Map of innovation module contribution degrees of 8 countries & territories Descriptive statistics: Maximum 1.67 The Innovation module contribution degrees are between and 1.67, with mean 2.97 and median 1.79, which indicating that Mean 2.97 innovation factors have less significant contribution to the II Median 1.79 Index of most countries and territories. From Figure 6.2, Figure 6.3 and Figure 6.4 we can see that, relatively speaking, Minimum innovation factors do have a greater contribution to the II Index of both Asian and European countries, but have no significant difference between developed and developing countries. 21

23 Figure 6.2 Top countries & territories ranked by innovation module contribution degrees Canada Belgium 1 Monaco Poland Hungary China Hong Kong Austria Philippines Mexico 1 Figure 6.3 Top countries & territories of different continents ranked by innovation module contribution degrees Asia Europe North America South America Africa Oceania China Belgium Canada Argentina Namibia Australia Hong Kong Monaco Mexico Uruguay Kenya Papua New Guinea Philippines Poland Guatemala Colombia Zimbabwe Fiji Turkey Hungary Cuba Brazil Sudan New Zealand Tajikistan Austria Honduras Peru Ghana 22

24 Figure 6.4 Top countries & territories of developed countries and developing countries ranked by innovation module contribution degrees Developed country Developing country Denmark Iceland Japan Australia Republic of Korea Germany Austria Hong Kong Belgium Canada Argentina Bulgaria Tajikistan Turkey Mexico Philippines China Hungary Poland Monaco

25 Chapter 7 Market Module Some key indicators Unit New real estate construction area thousand square meter Proportion of urban population % Population density population per kilometer Urban population growth %,growth a year Household final consumption expenditure per capita constant US$ Number of World top enterprises unit Figure 7.1 Map of market module contribution degrees of 8 countries & territories Descriptive statistics: Maximum The market module contribution degrees are between.1 and Mean , with mean 12.3 and median 12.12, which indicating that market factors have very significant contribution to the II Index Median of most countries and territories. From Figure 7.2, Figure 7.3 and Minimum.1 Figure 7.4 we can see that, relatively speaking, market factors do have a greater contribution to the II Index of both European and North American countries, but developing countries are more significant than developed countries. 24

26 Figure Top countries & territories ranked by market module contribution degrees Romania Portugal Serbia Cuba Venezuela Honduras Croatia Guatemala Iceland Arab Emirates 3 Figure 7.3 Top countries & territories of different continents ranked by market module contribution degrees Asia Europe North America South America Africa Oceania Arab Emirates Romania Cuba Venezuela Morocco New Zealand Kazakhstan Portugal Honduras Bolivia Angola Australia Saudi Arabia Serbia Guatemala Uruguay Zimbabwe Papua New Guinea Myanmar Croatia Costa Rica Chile Sudan Fiji Turkey Iceland United States Argentina Somalia 2

27 Figure 7.4 Top countries & territories of developed countries and developing countries ranked by market module contribution degrees Developed Country Developing Country Ireland United States Switzerland New Zealand Finland Japan Greece Sweden Iceland Portugal Morocco Costa Rica Arab Emirates Guatemala Croatia Honduras Venezuela Cuba Serbia Romania

28 Chapter 8 Infrastructure Module Some key indicators Internet popularity rate Railways mileage Railway freight volume Space freight volume Power generation Public health expenditure Unit %,per hundred thousand meters million tons/ thousand meters million tons/ thousand meters million kwh %,percentage of government expenditure Figure 8.1 Map of infrastructure module contribution degrees of 8 countries & territories Descriptive statistics: Maximum The Infrastructure module contribution degrees are between and 34.38, with mean 1.8 and median 16.92, which indicating Mean 1.8 that Infrastructure factors have very significant contribution to Median the II Index of most countries and territories. From Figure 8.2, Figure 8.3 and Figure 8.4 we can see that, relatively speaking, Minimum infrastructure factors do have significant contribution to the II Index of most countries in each continent, and developing countries are more significant than developed countries. 27

29 Figure Top countries & territories ranked by infrastructure module contribution degrees Serbia Maldives Madagascar Canada Uruguay Iran Sudan Cuba Bahamas Portugal Figure 8.3 Top countries & territories of different continents ranked by infrastructure module contribution degrees 3 Asia Europe North America South America Africa Oceania Maldives Serbia Canada Uruguay Madagascar Papua New Guinea Iran Portugal Cuba Chile Sudan Fiji Pakistan Switzerland Bahamas Ecuador Cameroon Australia Jordan Norway Cayman Islands Bolivia Tunisia New Zealand Myanmar Holland Costa Rica Argentina Congo Democratic 28

30 Figure 8.4 Top countries & territories of developed countries and developing countries ranked by infrastructure module contribution degrees Developed Country Developing Country Germany Cyprus Spain Italy Belgium Holland Norway Switzerland Portugal Canada Cameroon Pakistan Bahamas Cuba Sudan Iran Uruguay Madagascar Maldives Serbia

31 Chapter 9 Natural Environment Module Some key indicators Petroleum reserves Forest area Land area Unit billion barrels %, percentage of land area kilometer square Figure 9.1 Map of natural environment module contribution degrees of 8 countries & territories Descriptive statistics: Maximum The natural environment module contribution degrees are between and 17.37, with mean.3 and median 4.9, which Mean.3 indicating that natural environment factors have less significant Median 4.9 contribution to the II Index of most countries and territories. From Figure 9.2, Figure 9.3 we can see that, relatively speaking, Minimum natural environment factors have a greater contribution to the II Index of European countries, and Figure 9.4 indicates developing countries is more significant than developed countries. 3

32 Figure 9.2 Top countries & territories ranked by natural environment module contribution degrees Iceland Mauritania 1 Cuba Cayman Islands Norway Romania Madagascar Myanmar Venezuela Poland Figure 9.3 Top countries & territories of different continents ranked by natural environment module contribution degrees 1 Asia Europe North America South America Africa Oceania Myanmar Iceland Cuba Venezuela Mauritania Papua New Guinea Arab Emirates Norway Cayman Islands Ecuador Madagascar New Zealand Oman Romania United States Bolivia Abyssinia Fiji Vietnam Poland Jamaica Colombia Angola Australia Bangladesh Switzerland Mexico Brazil Senegal 31

33 Figure 9.4 Top countries & territories of developed countries and developing countries ranked by natural environment module contribution degrees Developed Country Developing Country United Kingdom France United States Austria Denmark New Zealand Portugal Switzerland Norway Iceland Arab Emirates Ecuador Poland Venezuela Myanmar Madagascar Romania Cayman Islands Cuba Mauritania

34 Chapter Social Environment Module Some key indicators Unit Total population person Health expenditure per capita US$ Dependency ratio %,non-working age population to the working age population 1-64 year old population proportion %,percentage of the total population Figure.1 Map of social environment module contribution degrees of 8 countries & territories Descriptive statistics: Maximum The social environment module contribution degrees are between and 28.17, with mean.84 and median.38, which Mean.84 indicating that social environment factors have more significant Median.38 contribution to the II Index of most countries and territories. Among top, there are 3 developed countries and 7 developing Minimum countries, and the proportions of developed and developing countries total samples respectively are nearly same. Besides, Figure.4 also indicates that social environment factors have significant contribution to both developed and developing countries. Figure.3 tells us that the social environment module contribution degrees of the top countries in other continents are all significant except South America. 33

35 Figure.2 Top countries & territories ranked by social environment module contribution degrees 3 Israel 2 1 Fiji Zambia Switzerland Zimbabwe Bahamas Uzbekistan New Zealand Tajikistan Congo Democratic 3 Figure.3 Top countries & territories of different continents ranked by social environment module contribution degrees 2 1 Asia Europe North America South America Africa Oceania Israel Switzerland Bahamas Uruguay Zambia Fiji Uzbekistan Luxembourg Canada Chile Zimbabwe New Zealand Tajikistan Lithuania Jamaica Colombia Congo Democratic Papua New Guinea Maldives Bulgaria Costa Rica Peru Mali Australia Kazakhstan Czech United States Bolivia Somalia 34

36 Figure.4 Top countries & territories of developed countries and developing countries ranked by social environment module contribution degrees Developed Country Developing Country Singapore Bulgaria Greece Lithuania Holland Mali Ireland Congo Democratic Canada Tajikistan Czech Uzbekistan Luxembourg Bahamas New Zealand Zimbabwe Switzerland Zambia Israel Fiji

37 Chapter 11 Force Majeure Module Some key indicators Unit Stock index closing price CPI % GDP million US$ Force majeure index / Figure 11.1 Map of force majeure module contribution degrees of 8 countries & territories Descriptive statistics: Maximum 18. The Force majeure module contribution degrees are between and 18., with mean 4.88 and median 4.34 which indicating that Mean 4.88 Force majeure factors have less significant contribution to the II Median 4.34 Index of most countries and territories. From Figure 11.2, Figure 11.3 and Figure 11.4 we can see that, relatively speaking, Force Minimum majeure factors have significant contribution to the II Index of most European, African and developing countries. 36

38 Figure 11.2 Top countries & territories ranked by force majeure module contribution degrees Monaco 1 Zambia Bulgaria Jamaica Czech Romania Hungary Costa Rica Yemen Zimbabwe Figure 11.3 Top countries & territories of different continents ranked by force majeure module contribution degrees 1 Asia Europe North America South America Africa Oceania Yemen Monaco Jamaica Argentina Zambia Papua New Guinea Indonesia Bulgaria Costa Rica Uruguay Zimbabwe Fiji Tajikistan Czech United States Peru Nigeria New Zealand Maldives Romania Honduras Bolivia South Africa Australia Israel Hungary Cuba Colombia Sudan 37

39 Figure 11.4 Top countries & territories of developed countries and developing countries ranked by force majeure module contribution degrees Developed Country Developing Country Japan Luxembourg Hong Kong Spain United States Denmark Israel United Kingdom Austria Czech Nigeria Zimbabwe Yemen Costa Rica Hungary Romania Jamaica Bulgaria Zambia Monaco 1 1 Copyright Statement: All information and data in this report may not be reproduced or transmitted in any form or by any means without permission. All rights reserved. For more information details, please contact us: International Investment Research Center of Wuhan University () iircc@whu.edu.cn Website: iirc 38