BERI index

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The BERI index is an index for country risk analysis and is created by Business Environment Risk Intelligence SA. This company has existed since 1966 and is headquartered in Friday Harbor , Washington State . BERI SA now analyzes 140 countries for risks. The analysis is carried out by experts from various industries. BERI SA also has a permanent committee that reviews the assessments and compiles the actual BERI index. The BERI index can be seen as a kind of hit list of investment friendliness in various countries. The index is mainly used as a tool for corporate decisions with regard to globalization and internationalization. The BERI index is not publicly available, but must be purchased.

method

The arithmetic mean is calculated from a point evaluation system (0 = not acceptable; 4 = very good) using the so-called Delphi method through expert surveys from various sectors (banks, industry) and research institutes. In detail, the BERI index is made up of the value of the POR index (Profit Opportunity Recommendation). This POR index is in turn derived from the sum of the ORI index (Operation Risk Index); the PRI index (Political Risk Index) and the R-factor (repayment factor).

The ORI index

The ORI index is a weighted average of (at the moment) 15 different criteria, such as: B. political stability; economic growth and currency convertibility . The results can then be read from their overall assessment as follows:

  • 100-71 points: stable country, excellent business climate
  • 70-56 points: moderate risk, some difficulties in daily operation
  • 55-41 points: high risk, bad business climate for foreign investors
  • 0-40 points: not acceptable

The PRI index

The PRI index is the evaluation of political risk, it is difficult to evaluate it objectively. The index is made up of the opinions of experts from internal causes of political risk, such as fractionalization of political power, as well as through languages ​​or ethnic groups. As well as external causes such as the influence of great powers and negative influences of regional political groups. Social conflicts , terrorism and political murders are seen as symptoms of political risk .

R factor

The so-called repayment factor represents the repayment risk of a country with regard to debt interest, repayment, etc. vis-à-vis foreign investors in hard currency, e.g. B. US dollars ,. These are assessed in grades 1-4. Criteria for this are, for example, balance of payments , currency reserves , foreign debts .

The POR index

Is the overall rating of a country from the sum of the three sub-indices ORI, PRI and R-factor. It is divided into four classes:

  1. Land suitable for investment
  2. Land suitable for long-term activities with little equity investment
  3. Land only suitable for foreign trade
  4. Land not suitable for economic activities

example

The actual BERI index is derived from the ranking of the countries examined (list from 2006):

  • 1. USA (75 points)
  • 2. Switzerland (74)
  • 3. Belgium (73)
  • 4. Japan (72)

Further:

  • Netherlands (66)
  • Germany (61)
  • Portugal (58)
  • Austria (57)
  • Turkey (56)
  • Czech Republic (55)
  • Hungary (55)
  • Poland (52)
  • China (46)

criticism

The BERI index only examines global factors and not industry-specific ones. It also contains subjective judgments, even if these assessments are made by experts. The BERI index is based on the past and therefore has only limited predictive power.

Web links

literature

Pepels, Werner (2008): Market Research - Organization and Practical Application, 2., revised. exp. Ed.