WHO IS THE BEST? INSIGHTS FROM THE BENCHMARKING OF BORDER REGIONS

This paper analyzes the attractiveness of 61 NUTS-2 EU regions as FDI locations, with an emphasis on the Austrian regions and the border regions in the neighbouring countries. To this end, the paper proposes a novel benchmarking methodology, which is based on the solution of a non-linear and non-convex optimisation problem and allows for the simultaneous evaluation of all indicators. Based on identical vectors of indicator weights for all regions under scrutiny in two cases and on region-specific vectors in a third case, we construct three different indices of location attractiveness. These differ from each other in terms of the underlying notion of optimality. Intervention-induced rank-engineering is ruled out since all indicator weights are determined endogenously jointly with the algorithmic solution to the optimisation problem. The empirical analysis conducted hereafter, drawing upon output-oriented indicators, demonstrates the applicability of the methodology.