Denmark, Sweden and Finland are the top European countries for business, according to 2017 research by EuCham – European Chamber, an independent, non-governmental organization representing the interests of national and international companies doing business in Europe. Romania ranked 26th, up three place on last year, while Hungary ranked 28th down one place on last year and Ukraine ranked 46th, an EuCham press release shows.
Entrepreneurs usually have personal experiences about doing business in a country, and their perceptions can be very different, depending on the business sector or geographic region. The EuCham research combines several factors into scores and a ranking which can be regarded as objective, according to the press release.An economy’s EuCham score is reflected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the best. Denmark tops the 2017 ranking with a score of 87, followed by Sweden, Finland, Norway and the United Kingdom.
EuCham research differs from others in that it also takes corruption into consideration, based on Transparency International’s Corruption Perceptions Index (CPI). The index is used to determine how corrupt each country’s public sector is seen to be on a scale from 0 (highly corrupt) to 100 (very clean). A low score can be a sign of widespread bribery, lack of punishment for corruption, or a government not responding to social needs.
Another important element used in the EuCham methodology is the World Bank’s Distance To Frontier (DTF) score. This measures the distance of each country’s economy to the frontier, mirroring the best performance on each indicator across all economies (e.g. starting a business, paying taxes, trading across borders, property registration). The difference is shown on a scale from 0 (lowest performance) to 100 (frontier); a score of 70 means that the economy is 30 points away from the frontier.
The EuCham score, used for the ranking, is the weighted average of the CPI and DTF scores (50% weight each). A high score indicates the country is favorable for business, while low scores indicate the countries least favorable for business. Another important element of the research is that it also contains the previous yearʼs ranking, thus showing the evolution of the business environment of each country.
This year, Romania ranked 26th of 46 countries in the survey, above Croatia and Hungary. This is three positions upper than in 2016 (from 29th to 26th), while Hungary felt one position this year (from 27th to 28th) and Ukraine remained at the same position, the 46th of 46 countries.
The bottom three positions are occupied by Russia, Azerbaijan and Ukraine.