A simple mathematical programming model for countries' credit ranking problem

Abstract

This study proposes a new mathematical model that ranks the countries according to their investments. The proposed model compares countries based on specified factors and gives a score for each country. To set out the factors, after investigating on quite a lot of related studies, several macroeconomic factors are gathered, and the most important ones are selected for further investigation. An important advantage of the proposed model is that it can be solved manually by managers, investors, or researchers without a need for any professional optimization solver software. The key factor in this research is developing a mathematical model that ranks any set of countries rather than rating them. At the end of pair comparison, countries are ranked from higher to lower scores from the economical point of view. In addition, the accuracy of the obtained result is validated by comparing them with Moody's rating system (August 2016) using Jaccard similarity index. The results of the proposed are compared with multiple criteria decision-making techniques as well.