Developing a Spatial Analysis-Based Model for Assessing Investment Potential in Local Self-Government Using the Analytic Hierarchy Process

The paper presents research on investigating the possible impact of spatial characteristics of a certain location on its investment potential, in a general sense. By applying multi-criteria decision analysis with the AHP method, a model for the investment potential assessment at the level of local self-government units in Republic of Croatia is developed and presented. By applying the model, the investment potential index is calculated for sample LGUs in Croatia. The model is tested using a calculated and published development index of each LGU in Croatia and the calculated investment potential index. The development index is observed to be a measure of the success of previous investments and economic action in the LGU. The statistical tests returned positive results, confirming the statistical significance and validity of the model.