Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)

Abstract

Prediction of Environmental Performance Based on Countries Economic Attractiveness

Author(s): V. Apalkova, ?. Nikolaienko, N. Meshko

In the article, the authors investigate the relationship between the basic parameters of the environmental performance and key indicators of the country's economic development, in particular such as the Human Development Index, Global Competitiveness Index, international tourism development and others. The analysis tools include correlation model and a decision tree, which based on the application of the RapidMiner software package and a database of more than 120 countries of the world. The study revealed a significant correlation between the Environmental Performance Index (EPI) and Human Development Index (0.83), the level of competitiveness of the economy (0.79) as well as GDP per capita (0.72). Besides, the calculated decision tree showed that the key factor influencing the EPI level is the income level of the population. The calculations show that countries with GDP per capita above certain level per year belong to the cluster of either high or medium environmental efficiency and their ecosystem are significantly influenced by the human development index. In the contrary, when the level of GDP per capita in economy is very low, the dominant value is no longer the human development index, but the number of registered enterprises in the country (the more intensive entrepreneurial activity the higher probability that country will have low environmental performance). The presence of a strong relationship between the environmental index (EPI) and human development index (0.83) suggests the need to improve the quality of human capital, especially in the countries of the third cluster of low environmental efficiency.

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