The Kearney FDI Confidence Index is a yearly poll that global business leaders use to pinpoint the most promising markets for attracting the largest investments over the next three-years. This index was created in 1998 and has been updated several times since. Global business leaders often rely on the primary data gathered from polls conducted by top executives at some of the largest companies in the world to conduct the index. The index is notable for its dependence upon forward-looking studies, which provide higher levels of trust than past-based research. The process is a great benefit to investors looking for relevant information about where their FDI might be focused. Specialists use many variables to build the index. This allows international companies to make educated judgments on the potential risks and benefits associated with certain locations.
The A.T. Kearney Index reveals that the company’s competitiveness and the macroeconomic environment are the two most important factors in attracting foreign direct investments (FDI). A nation’s macroeconomic conditions can have an impact on the rise or fall in direct investment over a given time. The investment climate in a country can have an impact on whether businesses are profitable or less competitive. The perception of investors in particular markets or countries can influence their investment propensity. Foreign direct investment could decline if there is a generalized pessimism.
Investor optimism could have a huge positive effect on foreign direct investments. There are many factors that could influence the potential for a rise of FDI, including the availability and sophistication of skilled labor forces as well as technological infrastructure. The index bases its differentiation between developing and developed economies on these factors. Economic stability and company rules are also important.
Credibility of the A.T. Kearney Index depends on the reputation and esteem of those who have been interviewed. The poll was typically conducted with C-level executives in organizations from 27 countries. Presumption is the that executives are competent and experienced enough to give a balanced evaluation of international business (especially FDI) (International Trade Administration (2016). International Trade Administration, 2016, cited previous research that showed the United States is in a strong position relative to other countries. According to CEOs, the U.S. is the best location to invest in international trade. A.T. Kearney conducted a poll in 2016 and found that Brazil’s appeal to international investors was rapidly fading due to the lack of trust by corporate executives about the country’s economy (Rapoza 2016). For predicting a country’s future economic direction, these A.T. Kearney insight are essential.
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