Transformations  in
Business & Economics

SIMILARITY ASSESSMENT OF ECONOMIC INDICATORS OF SELECTED COUNTRIES BY GRAPH THEORY MEANS
Erika Feckova Skrabulakova, Elena Gresova, Samer Khouri

ABSTRACT. In this paper we present a new way for comparing economic data based on tools of graph theory. In order to do that we use an edge-colouring of oriented graphs (digraphs in graph theory sense). According to our knowledge such an approach is new in connection to comparing these data and has not been used before. Here we describe this heuristic on a comparison of a chosen European Union countries that are similar according to their number of inhabitants and surface's size. We compare the digraphs obtained based on the values of different macroeconomic parameters. We discuss the relation between the colouring and incidence function of the digraphs with the correlation among the economic parameters. We show that graphs are worth to derive gathered knowledge of economic information, especially when making the cross-countries comparisons of economic data. We believe that a similar approach may be used in many other situations.

KEYWORDS:  digraph coloring, direct investment, export, gross domestic product, purchasing power standard.

JEL classification:  C02, C67.