Investment Risk and Energy Security Assessment of European Union Countries Using Multicriteria Analysis

Abstract

Investment opportunities are analyzed from the perspective of the variables that influence risk. The present study analyzes some energy characteristics using data from the Eurostat Data Browser. First, we identified a gap in energy research. Second, we proposed a multicriteria analysis using the analytic hierarchy process (AHP). An algorithm was developed to simulate how experts think to determine pairwise comparisons. A procedure identified the levels of importance of each criterion and alternative based on extracted data from the Eurostat website. The method was used to rate countries according to data regarding their energy policy results. The present study shows that applying the AHP method is possible without expert support and using data regarding the theme studied. The results show that Malta and Estonia are the most suitable countries to receive investments since they are presently at the top of the energy security ranking. The selected set of criteria seems to properly correspond with the assessment of the sector security as far as risk investment is concerned. The results of the current study may represent a base to support investment decision-making in the energy sector of EU countries.