Expert Systems with Applications 42 (2015) 1003–1012

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Expert Systems with Applications

journal homepage: www.elsevier.com/locate/eswa

A novel approach based on DEMATEL method and patent citation

analysis for prioritizing a portfolio of investment projects
Serkan Altuntas a,⇑, Türkay Dereli b
a
Department of Industrial Engineering, Bayburt University, Bayburt, Turkey
b
Department of Industrial Engineering, University of Gaziantep, Gaziantep, Turkey

a r t i c l e i n f o a b s t r a c t

Article history: The aim of this article is to propose a novel approach based on a method called Decision-Making Trial and
Available online 22 September 2014 Evaluation Laboratory (DEMATEL) and patent citation analysis for prioritizing the portfolio of investment
projects. The proposed approach reflects the government’s perspective and takes into account two impor-
Keywords: tant prioritization criteria. They are: (i) the decreasing rate of foreign trade deficits in the country and (ii)
Investment projects the potential to attract new investments which are not considered in the literature before. A case study
Project portfolio prioritization from Turkey is presented to demonstrate the benefits of the proposed approach. The findings show that
Patent citation analysis
the proposed approach can be used easily and efficiently to prioritize investment projects among avail-
The DEMATEL method
able project proposals.
Ó 2014 Elsevier Ltd. All rights reserved.

1. Introduction frequently with respect to given incentives by governments

Many governments allocate different types of incentives to
investors in order to increase the number of investments in their
country due to an investment’s positive effect on economy. A lot
of investors apply to governments to gain at least one type of
incentives each year. If these incentives are allocated arbitrary to
investors, the potential benefits from the investments may not be
realized for government. Because, some of the investment projects
proposed by investors may be more beneficial for country. There-
fore, prioritizing investment projects are quite important for gov-
ernments to make the right decisions and ensure the maximum
return. The research question of this study is what is an objective
and a quantitative approach for prioritizing a portfolio of investment
projects from government’s perspective? There is difficulty for two
reasons to give an answer to this research question. The first one
arises from the lack of information resources except for a project
feasibility report (Altuntas & Dereli, 2012) and there is therefore
a need to predict the future of the investment. To cope with the
first reason that causes difficulty, patent citation data is used for
prediction in this study due to the fact that it is an objective
resource and provides a good information resources for a invest-
ment project. The second reason that causes difficulty is that fac-
tors, which affect prioritization of investment projects, change
⇑ Corresponding author.
E-mail addresses: saltuntas@bayburt.edu.tr, saltuntas2@gmail.com (S. Altuntas),
dereli@gantep.edu.tr, turkay.dereli@gmail.com (T. Dereli).
because of the dynamic nature of the economy. To cope with the
second reason that causes difficulty, two factors need to be
addressed. These factors are decreasing rate of foreign trade deficits
and potential to attract new investments. These are the preferred
evaluation criteria in every period of time by the governments.
Investment projects which decrease foreign trade deficits and cre-
ate new investments should have higher priority than others
because these two factors are the fundamental dynamics of the
economy.
The possibility of creating these new investments for any
investment project requires significant consideration for govern-
ments because it is clear that unemployment decreases when the
new investment increases. Therefore, the future technological
impact of the invested technology with respect to attracting new
investments is considered in this study during the prioritization
of investment projects. In addition, foreign trade deficits are also
undesirable for countries and can cause large account deficits in
countries. Foreign trade deficits arise when a country’s imports
outnumber the country’s exports (imports > exports). Kayikci
(2011) emphasized that ‘‘growth and industrial production espe-
cially depends on the imported intermediate goods in Turkey
which causes foreign trade deficits in line with gross domestic
product growth’’. Through the example of Turkey, supporting
investment projects that decrease the foreign trade deficit is quite
important for the country’s economical future.
In this study, a novel integrated approach is proposed to give an
answer to the research question constructed in the first paragraph.

http://dx.doi.org/10.1016/j.eswa.2014.09.018
0957-4174/Ó 2014 Elsevier Ltd. All rights reserved.
1004 S. Altuntas, T. Dereli / Expert Systems with Applications 42 (2015) 1003–1012
The proposed approach uses the Decision Making Trial and Evalu-
ation Laboratory (DEMATEL) method to find the possibility of
attracting new investments (if one technology affects others there
is a possibility to create new investment due to the relations among
them) and foreign trade deficit ratio for the prioritization of invest-
ments. The proposed approach calculates a value which shows the
possibility of attracting new investments based on effects among
technologies. Subsequently, the foreign trade deficit ratio in the
country for the invested technology is calculated. Finally, the pro-
posed approach combines both the possibility of attracting new
investments and the foreign trade deficit ratio to sort investment
projects in descending order.
The use of the DEMATEL method provides some superiority for
this study. First, it allows decision makers to find casual relation
among investments. Finding association among technologies let
both investors and governments know about the potential of the
invested technology in the future and how one technology affects
another. The other superiority is that the findings from the DEMA-
TEL method show that invested technologies can be classified into
cause (net causes) and effect (net receivers) groups. The proposed
approach uses the values of these two groups based on the classi-
fication as an integral part of the prioritization process.
Through the proposed approach, a decision maker can gain a
view of the strength of the relationships between the invested
technology and other technologies. In addition, entrepreneurs
can also gain some ideas about the potential of their investments
in the future. A practical application of the proposed approach
could be used for governments or grant-giving institutions. The
proposed approach would allow them to sort investment projects
in descending order. In addition to these expected practical contri-
butions, the expected academic contribution of the present study is
threefold. Firstly, the proposed approach is novel and finds an
objective index value. Secondly, this is the first attempt which uses
the DEMATEL method to find relationship among technologies
(future technological impacts) via patent citation analysis. Thirdly,
this study differs from the previous works in that it considers both
the possibility of creating new investments and decreasing foreign
trade deficit in a country for investment projects.
The remainder of the paper is organized as follows. Literature
review is given in Section 2. The DEMATEL method is summarized
in Section 3. Following that, the proposed approach is introduced
in Section 4. Next, the application of the proposed approach is
given in Section 5. Conclusions and future research directions are
finally presented in Section 6.
2. Literature review
This section consists of two subsections. The first subsection
summarizes the studies related to the evaluation of investment
projects and incentives with respect to different aspects. The sec-
ond subsection reviews the literature regarding project portfolio
selection.
2.1. Evaluation of investment projects and incentives
A number of studies have been conducted to evaluate invest-
ment projects. A summary of these studies is given in Table 1. As
can be seen from this table, the studies are clustered in five catego-
ries, namely Multi Criteria Decision Making-Based Studies, Real
Option-Based Studies, Simulation-Based Studies, Fuzzy Logic-
Based Studies and a miscellaneous category labeled ‘‘other’’. In
addition to these studies, Remer and Nieto (1995a) presented net
present value and rate of return methods. Remer and Nieto
(1995b) introduced ratio, payback, and accounting methods for
the evaluation of investment projects. Additionally, Coldrick,
Longhurst, Ivey, and Hannis (2005) proposed an R&D options selec-
tion model for investment decisions. Alper and Anbar (2011) com-
pared the decision-tree method and the real-option approach for
investment projects.
Furthermore, investment projects are also examined from a
government’s perspective. Klakegg, Williams, Magnussen, and
Glasspool (2008) proposed governance frameworks to make the
governance of public investment projects possible and effective
and applied the framework in two countries, namely United King-
dom and Norway. Crawford and Helm (2009) provided expecta-
tions and realization of the value of project management in the
public sector with particular reference to the government context.
They conducted four case studies of Australian government agen-
cies based on interviews in their study. Shiferaw and Klakegg
(2012) proposed a project governance model based on a checklist
for public investment projects. The aim of the proposed model is
to select the right public investment projects and to ensure their
successful development. Shiferaw, Klakegg, and Haavaldsen
(2012) identified the most important front end challenges of public
investment projects in Ethiopia. Kahraman and Tolga (2010) intro-
duced fuzzy investment analysis techniques for the purposes of
evaluating investment projects.
Some researchers examined foreign investment projects as
well. Rubio and Munoz (2001), Li and Sherali (2003), Matouschek
and Venables (2005), Maeseneire and Claeys (2012) are examples
of the researchers who worked on the evaluation of the foreign
investments.
On the other hand, there are not many studies on investment
incentives, in the literature. Jenkins (1982) examined investment
incentives for tourism projects in developing countries. Ciloglu
(2000) analyzed the orientation power of incentive based policies.
Bronzini and Blasio (2006) evaluated the impact of investment
incentives in Italy. Seife (2006) searched impacts of investment
incentives on entrepreneurial choices of industry and location in
Ethiopia. Güven (2007) investigated the role of incentive policy
on income inequality by using a decomposition analysis. Duran
(2000) examined the regional effects of investment incentive poli-
cies in Turkey. Duran (1999) also underlined the structural charac-
teristics of the Turkish incentive system and principles of a rational
incentive system. Li, Gue, Liu, and Li (2008) examined the relation-
ship among governance incentive mechanisms, entrepreneurial
orientation, technological turbulence, and technology commercial-
ization. Additionally, study on the prioritization of investment pro-
jects with respect to incentives has recently been conducted by
Altuntas and Dereli (2012). Altuntas and Dereli (2012) proposed
an evaluation index system for the prioritization of investment
projects in respect to technology commercialization potential.
Details on incentive systems can also be found in Friedl (2007)
and Thomas (2007).
As can be seen the literature survey presented above, the stud-
ies on investment projects are examined rarely from a govern-
ment’s perspective. In addition, number of the studies which are
related to investment incentives is quite limited and they are not
proposed a quantitative and objective approach for prioritization.
2.2. Project portfolio selection
Project portfolio selection (PPS) is one of the research areas of
project portfolio management (PPM) discipline. Discussions and
reviews on PPM can also be found in Gutiérrez and Magnusson
(2014) and Martinsuo (2013). In addition, many studies have been
conducted to address the PPS from different aspects. Among these
studies, Archer and Ghasemzadeh (1998), Ghasemzadeh and
Archer (2000) and Hu, Wang, Fetch, and Bidanda (2008), developed
a decision support system for the PPS. Archer and Ghasemzadeh
(1999) proposed an integrated framework for the PPS. In addition
 S. Altuntas, T. Dereli / Expert Systems with Applications 42 (2015) 1003–1012
Table 1
Summary table of studies related to investment projects.
Author(s) (pub. year)
Vasovic, Radojicic, and Vasovic (2012)
Trudel and Zaras (2012)
Kvaracíejiene, Apanaviciene, and Butauskas (2010)
Jiang and Ruan (2010)
Yao, Lian, Bai, and Sun (2009)
Beltrán, González, Ferrando, and Pozo (2010)
Nowak (2005)
Yalcinkaya and Armaneri (2012)
Armaneri, Ozdagoglu, and Yalcinkaya (2010)
Balasubramanian, Kulatilaka, and Storck (2000), Bellalah, Ding, and Wu (2012), Boomsma, Meade, and Fleten (2012),
Chen, Zhang, and Lai (2009), Fernandes, Cunha, and Ferreira (2011), He (2007), Karami and Farsani (2011), Kayali
(2006), Madlener and Stoverink (2012), Muñoz, Contreras, Caamaño, and Correia (2011), Yang (2010), Yeo and Qiu
(2003)
Dimova, Sevastianova, and Sevastianov (2006), Ho and Liao (2011a), Ho and Liao (2011b), Huang (2007), Irani, Sharif,
Love, and Kahraman (2002), Karsak and Tolga (2001), Liao and Ho (2010), Ozkir and Demirel (2012), Rebiasz
(2007), Teng and Tzeng (1998)
Babusiaux and Pierru (2009)
Borgonovo and Peccati (2006)
Pendharkar (2010)
Mohamed and McCowan (2001)
Borgonovo and Peccati (2004), Jovanovic (1999)
to these studies, studies based on fuzzy logic are also conducted for
the PPS. Among them are; a model based on fuzzy set theory and
multi-criteria group decision making method (Wei & Chang,
2011), fuzzy rule-based multi-criteria framework (Khalili-
Damghani, Sadi-Nezhad, Hosseinzadeh Lotfi, & Tavana, 2013), a
fuzzy multidimensional multiple-choice knapsack model (Tavana,
Khalili-Damghani, & Abtahi, 2013), and binary fuzzy outranking
relation (Fernandez, Lopez, Mazcorro, Olmedo, & Coello, 2013).
Pareto Ant Colony Optimization (Doerner, Gutjahr, Hartl, Strauss,
& Stummer, 2004 and Doerner, Hartl, Strauss, & Stummer, 2006)
and multi-objective binary programming (Carazo et al., 2010) are
also proposed for Multiobjective Portfolio Selection problem. In
addition, the works of various authors are focused on R&D portfolio
selection (see e.g.: Chu et al., 1996; Gear, Lockett, & Pearaon, 1971;
Linton, Walsh, & Morabito, 2002; Ringuest, Graves, & Case, 2004
and Bhattacharyya, Kumar, & Kar, 2011; Wang & Hwang, 2007).
Bardhan, Bagchi, and Sougstad (2004) prioritized a portfolio of
information technology investment projects. Additionally, Strang
(2010) proposed AHP based portfolio selection methodology for a
nuclear project.
Abbassia, Ashrafi, and Tashnizi (2014) used a cross-entropy
based methodology for prioritizing a portfolio of R&D projects with
interdependencies. Pendharkar (2014) presented decision-making
framework for evaluating a portfolio of IT projects. The presented
framework uses a mixed integer programming for IT project port-
folio with interdependencies and a dynamic programming for IT
project portfolio contains independent projects. Dutra, Ribeiro,
and Carvalho (2014) proposed an economic-probabilistic model
for project selection and prioritization. Economic aspects of the
model analyze relative return, obsolete return and payback period
of the projects. In addition, probabilistic aspects of the model use a
Monte Carlo simulation for project selection and prioritization.
Aragonés-Beltrán, Chaparro-González, Pastor-Ferrando, and Pla-
Rubio (2014) proposed analytic hierarchy process and analytic net-
work for the selection of solar-thermal power plant investment
projects process. Brook and Pagnanelli (2014) presented frame-
work for integrating sustainability in the innovation project
1005
Tool(s)/method(s)
Multi criteria decision making-based studies
PROMETHEE
Analytic hierarchy process and dominance-
based rough set approach
TOPSIS
Analytic hierarchy process and BP neural
network model
Analytic hierarchy process
Analytic network process
Simulation-based studies
Simulation and PROMETHEE II
Simulation
Simulation and fuzzy set theory
Real option-based studies
Real option
Fuzzy logic-based studies
Fuzzy logic
Other
Displaced equity method
Global sensitivity analysis techniques
Binomial lattice based real options model
Possibility theory
Sensitivity analysis
portfolio management process and a case analysis in the automo-
tive industry. Ribas and Rocha (2014) used fuzzy analytical hierar-
chy process (Fuzzy AHP) to rank a set of five investments in an
energy efficiency program in the city of Rio de Janeiro. They inte-
grated qualitative and quantitative assessment of expert opinions
in the ranking process. Khalili-Damghani and Tavana (2014) pro-
posed a framework which uses structural equation model, for sus-
tainable project portfolio selection and applied the proposed
framework for a case study in investment banking. Motta and
Garcia (2014) proposed a patento-scientometric approach which
considers technology, market, divestment and team criteria for
investment prioritization and a case study including ten invest-
ment proposals is performed to illustrate the proposed approach.
Arasteh, Aliahmadi, and Omran (2014) proposed a method which
composed of grey systems, fuzzy logic, and real options for project
portfolio selection. The current literature conducted heavily quali-
tative research based on expert opinion. Many number of invest-
ment projects are applied to government for the usage of
incentives each year. It is not possible to prioritize these invest-
ment projects based on expert opinion due to the two reasons.
First, finding experts to evaluate investment projects is quite diffi-
cult due to the fact applications come in many different fields. Sec-
ond, expert assessments are time consuming because of the fact
that the number of investment projects is quite huge. The proposed
approach in this paper is based on quantitative research and there-
fore, the results are not affected by expert opinion. In addition, the
current literature did not focus on prioritization of a portfolio of
investment projects from the perspective of the government.
As can be seen from the literature review, the integration of the
DEMATEL method and patent citation analysis has not been con-
ducted so far. Although governments want to support investors
who will invest in technology which has the potential to (i)
decrease the foreign trade deficit in the country and (ii) attract
new investments, scholars and researchers have not focused on
these two factors simultaneously when prioritizing investment
projects through a quantitative approach in the literature. Hence,
the prioritization of projects in many organizations is still based
1006 S. Altuntas, T. Dereli / Expert Systems with Applications 42 (2015) 1003–1012

on purely subjective judgments (Padhy & Sahu, 2011). Therefore,

there is a need to develop an objective and quantitative approach
that can be used by governments to prioritize investment projects Patent database
and decreases foreign trade deficits and have potential to attract
new investments. The present study attempts to fill this significant Find patent citation number between technology classes
gap in the literature. Thus, this study differs from the previous
works in that it considers these two key investment criteria, which
also imply the sustainability of the investment projects in the Use DEMATEL method to find the effect among technologies
future, together from the perspective of the government.
Calculate current account deficit ratio
3. The DEMATEL method
Compute Final Prioritization Score (FPS) for investment project
The DEMATEL method has been extensively applied for the dif-
ferent selection problems. However, in most studies, the DEMATEL
method combined with other methods are used to prioritize alter- Fig. 1. Overall process for proposed approach.

natives such as Altuntas and Dereli (2012), Shen, Lin, and Tzeng
(2011).
The basic steps of the DEMATEL method is summarized below
which is based on the study given in Liou, Tzeng, and Chang
(2007) and Wu (2008).
Step 1: Compute average initial direct-relation matrix (matrix
A). In the literature, there are survey studies which are conducted
by asking experts in the relevant topic to construct matrix A. The
survey includes a comparison scale to find influence and direction
among criteria with respect to expert opinions. The comparison
scale includes four levels, (0) no influence, (1) low influence, (2)
medium influence, and (3) high influence. However, in this study,
patent data is used instead of conducting a survey study to con-
struct average initial direct-relation matrix. Citations between
technology classes are used assuming that the number of citations
show the degree of influence between the technologies. Therefore,
citation frequency matrix is named the average initial direct-rela-
tion matrix. As an example, the general form of citation frequency
matrix is given in Table 2. It should be noted that the value of the
diagonal elements of the matrix is zero because of the properties of
the DEMATEL method. The matrix is asymmetric because citations
between patents have a direction from a citing patent to a cited
patent. Normally, the basic notation to compute matrix A for a sur-
vey study is given as follows.
Xij = degree of influence for factor i to factor j.
H = total responses (experts), n = number of factors.
Xk = n  n non-negative matrix for kth respond.
X kij = degree of influence of factor i to factor j with respect to kth
respond.
Matrix A = [aij] can be computed as follows.
X
H sequently, the foreign trade deficit ratio in the country is calculated
aij ¼ ð1=HÞ X kij
k¼1
Step 2: Compute normalized initial direct-relation matrix
(matrix D). The formulation to compute matrix D is as follows.
!
X
n
S ¼ 1= max aij ð2Þ
1<i<n
j¼1
D ¼ AxS: ð3Þ
Step 3: Compute factor total-influence matrix (matrix T). The
formulation to compute matrix D is given as follows.
I = identity matrix
T ¼ DðI  DÞ1 ð4Þ
Step 4: Compute C, R, R + C, and R  C values and also set thresh-
old value to obtain digraph of showing causal relations among the
criteria. The basic notations to conduct this step are given as
follows.
C = sum of column of the matrix T, cj represents direct and indi-
rect effects on factor j by the other factors.
R = sum of row of the matrix T, ri represents direct and indirect
effects given by factor i to the other factor.
ri + cj = the importance of factor i.
ri  cj = the net effect of factor i.
4. The proposed approach
An overall view for the process of the proposed approach is pre-
sented in Fig. 1. The steps of the proposed approach are also given
in detail in Fig. 2. As it can be seen from Fig. 1, the patent citation
number between technology classes is first obtained from a patent
database. Next, the DEMATEL method is conducted to find the
effect among technologies by using patent citation numbers. Sub-
ð1Þ for the invested technology. The Final Prioritization Score (FPS) for
the investment project is finally computed. In Fig. 2, the first two
steps address defining the problem and obtaining the input data
via patent citation analysis. After defining the problem and data
collection, the DEMATEL method is performed to find relations
among technologies in Steps 2–5. Subsequently, in Step 6 the value

Table 2
General form of citation frequency matrix (matrix A).

Technology class ‘‘Y’’ (citing patent)

1 2 ... y ...
Technology class ‘‘X’’ (cited patent) 1 0 C12 ... C1y ...
2 C21 0 ... C21 ...
... ... ... 0 ... ...
... ... ... ... 0 ...
x Cx1 Cx2 ... Cxy 0

Cij: Citation number from jth patent to ith patent.

 S. Altuntas, T. Dereli / Expert Systems with Applications 42 (2015) 1003–1012 1007

of the degree of influence (importance of relation degree for invest-
ment project) is calculated for the investment project. The degree
of influence composes both effects to the invested technology class
(from the other technology class (Value ‘‘A’’)) and effects given by
the invested technology class to the other technology class (Value
‘‘B’’). In Step 7 the question is posed, ‘‘Is there a foreign trade deficit
for the invested technology?’’ If the answer to this question is yes,
then the proposed approach leads to Step 8 where foreign trade def-
icit ratio (FTDR) is computed for the invested technology. If the out-
come of the answer in Step 7 is no, the proposed approach
continues on to Step 11 where Final Prioritization Score (FPS) is
computed. In Step 8, the Foreign Trade Deficit Ratio (FTDR) is
computed for the invested technology. A weight for both attracting
new investments (Wab) and decreasing the foreign trade deficit
(Wftdr) criteria is assigned to reflect the factors importance, in Step
9. Finally, the FPS including the FTDR is computed by considering
the factors weights and then stops. As a result, at the end of Step
10 or Step 11, the final score is evaluated through the use of values
given in Table 3. There are six investment evaluation degrees,
namely; excellent, very good, good, fair, poor, very poor and each
of those are divided into three classes, namely; high, medium and
low for accurate scoring as shown in Table 3. The numbers between
0.000 and 0.314 are divided into small intervals to increase the
sensitivity of assessment. The values above 0.314 are considered

BEGIN

Step 1: Define corresponding technology classes for invested technology by using any
patent classification system

Step 2: Construct initial direct-relation matrix (Matrix A- patent citation frequency matrix)

DEMATEL Method
Step 3: Compute normalized initial direct-relation matrix (Matrix D)

Step 4: Compute factor total-influence matrix (Matrix T)

Step 5: Compute C, R, R+C, and R-C values

Step 6: Compute “A” and “B” values which show the possibility of attracting new
investments

A= R+C value for the invested B= R-C value for the invested
technology / the sum of all R+C values technology / the sum of all R- C values
for technologies with positive R-C
values.

No
Step 7: Is there a foreign trade deficit for the
invested technology?

Yes
Step 8: Compute foreign trade deficit ratio (FTDR) for the invested technology

FTDR= ((Import-Export) value for invested technology) / (Total (Import-Export) value in

the country)

Step 9: Assign a weight for both attracting new investments (Wab) and decreasing foreign
trade deficit (Wftdr) criteria to reflect their importance (Sum of factors’s weight should be
1).

Step 10: Compute Final Prioritization Score including foreign trade deficit ratio (FPS)

FPS = (A + B) *Wab + FTDR*Wftdr

Step 11: Compute Final Prioritization Score (FPS)

FPS = (A + B) / 2

STOP

: Formula for computation

: The path of the proposed approach

Fig. 2. The proposed approach.

1008 S. Altuntas, T. Dereli / Expert Systems with Applications 42 (2015) 1003–1012

Table 3 systems and devices (367), Multiplex communications (370), Pulse

Final prioritization value. or digital communications (375), Telephonic communications
Score Prioritization class Prioritization value (379), Cryptography (380), Telecommunications (455). Table 4,
0.800–1.000 High which is obtained from Lee et al. (2009)’ study, gives citation fre-
0.600–0.790 Medium Excellent quency between technology classes. It should be noted that ‘‘zero’’
0.315–0.590 Low is assigned at the diagonal because of the properties of the DEMA-
0.294–0.314 High TEL method, although there are citations between the same classes
0.273–0.293 Medium Very good
0.252–0.272 Low
in this table. For example, communications electrical: acoustic
0.231–0.251 High wave systems and devices (367) includes three subclasses and
0.210–0.230 Medium Good the citation frequency among them is four (Lee et al. (2009). How-
0.189–0.209 Low ever, ‘zero’ is assigned at the diagonal where 376 cross 376. Details
0.168–0.188 High
on the application of the proposed approach in this study are given
0.147–0.167 Medium Fair
0.126–0.146 Low below in a stepwise manner.
0.105–0.125 High Step 1: Define corresponding technology classes for invested tech-
0.084–0.104 Medium Poor nology by using any patent classification system: In this paper, it is
0.063–0.083 Low assumed that the entrepreneur has an investment project related
0.042–0.062 High
to Pulse or digital telecommunication technology (375). This is
0.021–0.041 Medium Very poor
0.000–0.020 Low applied to the Turkish government for incentives. Lee et al.
(2009) defined thirteen telecommunication technology classes by
using International Patent Classification (IPC). These are given in
the above mentioned lines.
to be ‘‘excellent’’ due to the fact that there is a high possibility that
Step 2: Construct initial direct-relation matrix (Matrix A- patent
most of the investment projects will have a score which is below
citation frequency matrix): Lee et al. (2009) is also used to construct
0.314 based on our impressions while carrying out this work.
patent citation frequency between technology classes in this step.
The mission of Table 3 is to classify investment projects and to
Table 4 shows initial direct-relation matrix for telecommunication
evaluate them linguistically. However, the main aim of this paper
technology. Lee et al. (2009) used the United States Patent and
is to propose a novel approach to sort investment projects in
Trademark Office (USPTO) database to conduct patent citation
descending order according to the criteria considered in evaluation
analysis for telecommunication technology.
process. The proposed approach finds an index value for each
Step 3: Compute normalized initial direct-relation matrix (Matrix
investment project. It is prudent to note that this index value is
D): Normalized initial direct-relation matrix is computed by using
used to compare investment projects against one another. There-
Eqs. (2) and (3). The results are given in Table 5.
fore, it is actually not compulsory to use Table 3 while conducting
Step 4: Compute factor total-influence matrix (Matrix T): Total-
the proposed approach.
influence matrix (Matrix T) shows the degree of influence among
the technologies. This matrix is computed by using Eq. (4) and
5. Case study the results are given in Table 6.
Step 5: Compute C, R, R + C, and R  C values: The results are sum-
Data provided by Lee, Kim, Cho, and Park (2009) is used in this marized in Table 8. Fig. 3 is also drawn to show causal relations
paper as input to demonstrate the computational process, to pro- among technologies. The average of the elements in matrix T
vide evidences for the applicability of the proposed approach and (Table 6) is 0.06224. This value shows ‘‘threshold value’’ to con-
to confirm the viability of the proposed approach in this section. sider meaningful influence through technologies. The threshold
Lee et al. (2009) proposed a method for identification of the core value is not determined based on experts’ opinion or the average
technologies based Analytic Network Process (ANP) and conducted of the values in the literature. In this paper, the reason for using
a case study for telecommunication technologies. They constructed the average of the values is to escape the expert’s bias. To improve
citation frequency matrices for the thirteen classes of telecommu- the intelligibility of Table 6, Table 7 is also constructed to show
nication technology. These are: Demodulators (329), Oscillators that whether there is relation between technology classes by con-
(331), Modulators (332), Communications: electrical (340), Coded sidering influence values that above 0.06224. In addition, Fig. 3 is
data generation or conversion (341), Communications: directive drawn by considering influence values that are above 0.06224.
radio wave systems and devices (342), Communications: radio From these causal relations, governments can gain valuable clues
wave antennas (343), Communications, electrical: acoustic wave for investment projects. As shown in the causal diagram (Fig. 3),

Table 4
Initial direct-relation matrix (matrix A).

455 380 379 375 370 367 343 342 341 340 332 331 329
455 0 7714 166 6804 744 20 10 344 140 1034 2837 12,884 3583
380 3303 0 397 1160 794 3 0 32 241 1369 114 273 176
379 1521 4514 0 208 212 36 0 26 17 279 77 200 37
375 6469 5030 29 0 1380 50 4 226 356 294 4466 9605 7497
370 1815 6560 58 3151 0 35 0 54 61 310 540 1058 1229
367 59 87 0 11 0 0 0 8 55 17 3 104 15
343 94 46 0 46 0 0 0 43 0 17 16 386 18
342 844 693 3 580 33 5 18 0 4 295 191 1347 405
341 284 1132 26 770 20 12 0 12 0 227 208 1882 237
340 2145 12 81 644 141 0 24 300 482 0 130 1379 314
332 1727 51 2 2630 53 5 0 33 74 15 0 2869 509
331 10,748 566 9 7180 104 70 57 495 207 137 2045 0 1121
329 1495 34 0 3384 80 5 0 63 47 40 453 1373 0
 S. Altuntas, T. Dereli / Expert Systems with Applications 42 (2015) 1003–1012 1009

Table 5
Normalized initial direct-relation matrix (matrix D).

455 380 379 375 370 367 343 342 341 340 332 331 329
455 0 0.2126 0.0046 0.1875 0.0205 0.0006 0.0003 0.0095 0.0039 0.0285 0.0782 0.3551 0.0988
380 0.0910 0 0.0109 0.0320 0.0219 0.0001 0 0.0009 0.0066 0.0377 0.0031 0.0075 0.0049
379 0.0419 0.1244 0 0.0057 0.0058 0.0010 0 0.0007 0.0005 0.0077 0.0021 0.0055 0.0010
375 0.1783 0.1386 0.0008 0 0.0380 0.0014 0.0001 0.0062 0.0098 0.0081 0.1231 0.2647 0.2066
370 0.0500 0.1808 0.0016 0.0869 0 0.0010 0 0.0015 0.0017 0.0085 0.0149 0.0292 0.0339
367 0.0016 0.0024 0 0.0003 0 0 0 0.0002 0.0015 0.0005 0.0001 0.0029 0.0004
343 0.0026 0.0013 0 0.0013 0 0 0 0.0012 0 0.0005 0.0004 0.0106 0.0005
342 0.0233 0.0191 0.0001 0.0160 0.0009 0.0001 0.0005 0 0.0001 0.0081 0.0053 0.0371 0.0112
341 0.0078 0.0312 0.0007 0.0212 0.0006 0.0003 0 0.0003 0 0.0063 0.0057 0.0519 0.0065
340 0.0591 0.0003 0.0022 0.0178 0.0039 0 0.0007 0.0083 0.0133 0 0.0036 0.0380 0.0087
332 0.0476 0.0014 0.0001 0.0725 0.0015 0.0001 0 0.0009 0.0020 0.0004 0 0.0791 0.0140
331 0.2963 0.0156 0.0002 0.1979 0.0029 0.0019 0.0016 0.0136 0.0057 0.0038 0.0564 0 0.0309
329 0.0412 0.0009 0.0000 0.0933 0.0022 0.0001 0 0.0017 0.0013 0.0011 0.0125 0.0378 0

Table 6
Total-influence matrix (matrix T).

455 380 379 375 370 367 343 342 341 340 332 331 329
455 0.3163 0.3607 0.0107 0.423 0.0539 0.0027 0.0014 0.025 0.0167 0.0581 0.195 0.6124 0.2435
380 0.147 0.0526 0.0124 0.0894 0.0301 0.0005 0.0002 0.0047 0.0097 0.0455 0.0322 0.0913 0.0429
379 0.0809 0.1507 0.0021 0.0401 0.0126 0.0012 0.0001 0.0027 0.0028 0.0164 0.0172 0.0494 0.0204
375 0.4333 0.2875 0.0065 0.2471 0.0654 0.0031 0.0011 0.0204 0.0203 0.0366 0.2231 0.5213 0.324
370 0.1516 0.242 0.0052 0.165 0.0155 0.0016 0.0003 0.0065 0.0069 0.0242 0.0571 0.1384 0.0901
367 0.0042 0.0039 0.0001 0.0026 0.0003 0 0 0.0004 0.0016 0.0008 0.0011 0.0054 0.0016
343 0.0096 0.0047 0.0001 0.0071 0.0006 0 0 0.0016 0.0003 0.0011 0.0031 0.0165 0.0035
342 0.0616 0.0414 0.0009 0.049 0.0053 0.0004 0.0006 0.0021 0.0018 0.0123 0.0211 0.0759 0.0305
341 0.0519 0.0526 0.0016 0.0551 0.0053 0.0006 0.0002 0.0026 0.0018 0.0106 0.0222 0.0888 0.0267
340 0.1077 0.0368 0.0032 0.0656 0.0099 0.0004 0.0009 0.0112 0.0154 0.0057 0.0266 0.0992 0.0371
332 0.1352 0.0555 0.0015 0.1439 0.0117 0.0008 0.0003 0.0057 0.0056 0.0085 0.0392 0.1723 0.0638
331 0.4912 0.1866 0.0051 0.388 0.0334 0.0034 0.0023 0.0258 0.0154 0.03 0.1632 0.302 0.1739
329 0.1157 0.0511 0.0013 0.1509 0.012 0.0007 0.0003 0.0058 0.0046 0.0083 0.0482 0.126 0.048

Table 7
Summary table obtained from Table 6.

455 380 379 375 370 367 343 342 341 340 332 331 329
455 YES YES 0 YES 0 0 0 0 0 0 YES YES YES
380 YES 0 0 YES 0 0 0 0 0 0 0 YES 0
379 YES YES 0 0 0 0 0 0 0 0 0 0 0
375 YES YES 0 YES YES 0 0 0 0 0 YES YES YES
370 YES YES 0 YES 0 0 0 0 0 0 0 YES YES
367 0 0 0 0 0 0 0 0 0 0 0 0 0
343 0 0 0 0 0 0 0 0 0 0 0 0 0
342 0 0 0 0 0 0 0 0 0 0 0 YES 0
341 0 0 0 0 0 0 0 0 0 0 0 YES 0
340 YES 0 0 YES 0 0 0 0 0 0 0 YES 0
332 YES 0 0 YES 0 0 0 0 0 0 0 YES YES
331 YES YES 0 YES 0 0 0 0 0 0 YES YES YES
329 YES 0 0 YES 0 0 0 0 0 0 0 YES 0

the evaluation criteria are visually divided into the cause group
(net causes) including technology classes (455), (379), (375),
(370), (367), (343), (342), (341) and (340). The effect group (net
receivers) was composed of criteria including technology classes
(380), (332), (331) and (329). As it can be seen from Fig. 3, technol-
ogy class (375), (455) and (331) affect themselves as well.
Step 6: Compute ‘‘A’’ and ‘‘B’’ values: The calculations of these fac-
tors’ values are given in the following.
 A = R + C value for the invested technology/the sum of all
R + C values
– R + C value for the invested (375) technology = 4.0165
– The sum of all R + C values = 14.9620
– A = 4.0165/21.0372 = 0.1910
 B = R  C value for the invested technology/the sum of all
R  C values for technologies with positive R  C values.
– RC value for the invested (375) technology = 0.3629
– The sum of all R  C values for technologies with positive
R  C values = 2.1846
– B = 0.3629/2.1846 = 0.1661
Step 7: Is there a foreign trade deficit for the invested technology?:
In this study, we try to obtain export and import values for pulse or
digital telecommunication technology from the Turkish Statistical
Institute’s web site (www.tuik.gov.tr). This is used to calculate for-
eign trade deficits for the invested technology by using imports
minus exports formula. However, the classification system which
is done by the Turkish Statistical Institute is not the same as USPTO
database. Therefore, we research to find the most similar class for
pulse or digital telecommunication technology on the Turkish Sta-
tistical Institute’s web site (www.tuik.gov.tr) to show the computa-
tional process of the proposed approach. Finally, it is assumed that
optical instruments and parts technology can be considered the
1010 S. Altuntas, T. Dereli / Expert Systems with Applications 42 (2015) 1003–1012

Table 8 Step 10: Compute Final Prioritization Score including foreign trade
The sum of influences given and received among the technologies. deficit ratio (FPS): The calculation of Final Prioritization Score is as
Technology classes R C R+C RC follows:
455 2.3194 2.1062 4.4256 0.2132
380 0.5585 1.5261 2.0846 0.9676 FPS ¼ ðA þ BÞ  W ab þ FTDR  W ftdr
379 0.3966 0.0507 0.4473 0.3459
375 2.1897 1.8268 4.0165 0.3629
¼ ð0:1910 þ 0:1661Þ  0:5 þ 0:00067  0:5 ¼ 0:1788
370 0.9044 0.256 1.1604 0.6484
367 0.022 0.0154 0.0374 0.0066
The FPS for the tested investment project is 0.1788. This means
343 0.0482 0.0077 0.0559 0.0405 that the potential of the investment with respect of the criteria
342 0.3029 0.1145 0.4174 0.1884 considered is fair. Therefore, the investment project will decrease
341 0.32 0.1029 0.4229 0.2171 the foreign trade deficit fairly. In addition, if an investor invests in
340 0.4197 0.2581 0.6778 0.1616
that technology, there may be new investment in the future. The
332 0.644 0.8493 1.4933 0.2053
331 1.8203 2.2989 4.1192 0.4786 entrepreneur has a sufficient investment project due to the classi-
329 0.5729 1.106 1.6789 0.5331 fication of the investment as fair in the high prioritization class
based on Table 3. In this situation, the entrepreneur can invest
and the government can also support that investor. The prioritiza-
most similar class among the classes that are done by the Turkish
tion of different investment projects can also be done using the
Statistical Institute. If the import minus export is negative, there
suggested approach and can be put in order according to their pri-
is no foreign trade deficit for the invested technology. Therefore,
oritization value.
Steps 7, 8, 9 and 10 should be passed. For this case study, there
is a foreign trade deficit for the invested technology and we go to
Step 8.
6. Conclusions, implications and future research directions
Step 8: Compute foreign trade deficit ratio (FTDR) for the invested
technology: The calculation of the FTDR value is given in the follow-
This study focused on the prioritization of investment projects
ing based on the Turkish Statistical Institute.
from the government’s perspective. The proposed approach can
Total Import in optical instruments and parts for be easily conducted and project proposals can be ranked in
2011 = 87.296.319 $ (Dollars) descending order regarding their Final Prioritization Score (FSP). In
Total Export in optical instruments and parts for addition, the managers can effectively allocate incentives among
2011 = 15.974.042 $ (Dollars) investors by using the results of the proposed approach. Further-
Total Import in Turkish industry for 2011 = 240.841.676.274 $ more, the proposed approach can also be objectively used in the
(Dollars) different cases by the different managers because the proposed
Total Export in Turkish industry for 2011 = 134.906.868.830 $ approach is a quantitative.
(Dollars) The current literature conducted heavily qualitative research
FTDR = (87.296.319  15.974.042)/ based on expert opinion. Many number of investment projects
(240.841.676.274  134.906.868.830) = 0.00067 are applied to government for the use of incentives each year in
Turkey. It is not possible to prioritize these investment projects
Step 9: Assign a weight for both attracting new investments (Wab) based on expert opinion due to the two reasons. First, finding
and decreasing foreign trade deficit (Wftdr) criteria to reflect their experts to evaluate investment projects is quite difficult due to
importance (Sum of factors’s weight should be 1): The decision the fact applications come in broad range of fields. Second, expert
related to determine the factors’ weight should be decided by the assessments are time consuming because of the fact that the num-
government according to their importance. In this paper, it is ber of investment projects is quite huge. The proposed approach in
assumed that two factors have the same importance. Therefore, this paper is based on quantitative research and therefore, the
0.5 is assigned for each factor. results are not affected by expert’s opinion. The current literature
did not focus on prioritization of a portfolio of investment projects
from the perspective of the government.
This study proposed a new approach to prioritize investment
projects by measuring their possibility for decreasing foreign trade
The cause group deficit and creating new investments simultaneously. To date, there
is no study that considers both decreasing rate of foreign trade def-
icit in the country and potential to attract new investments. To the
best knowledge of the authors, there is no study in the literature
which proposed a systematic approach to prioritization of invest-
ment projects, which may also be used by policy makers (e.g. gov-
ernments, grant based institutions). Therefore, the aim of the
present study is to help governments to prioritize investment pro-
jects that apply for incentives with respect to two criteria, their
possibility for decreasing foreign trade deficit and creating new
investments in the future. There is a lack of study that considers
these two criteria together in the literature. The present study tries
to fill in this gap. It should be noted that the two factors considered
are subject to vary due to the nature of the economy. The proposed
The effect group approach can be used in every period of time by governments. It is
a well-known fact that an investment which has a low prioritiza-
tion score cannot obtain expected benefits from the given incen-
tives by the government to entrepreneur relationship and can
Fig. 3. The digraph showing causal relations among technologies. waste a country’s precious resources as well.
 S. Altuntas, T. Dereli / Expert Systems with Applications 42 (2015) 1003–1012
This research uses both the DEMATEL method and patent cita-
tion analysis for project portfolio prioritization. The proposed
approach conducts first patent citation analysis to construct a pat-
ent citation frequency matrix which shows the effect of the fre-
quency of citation from one technology class to another. The
causal relationships among technologies are also established
through the use of the DEMATEL method presented in this study.
Subsequently, foreign trade deficit ratio in the country is calculated
for the invested technology. Additionally, the possibility of attract-
ing new investments is computed via patent citation frequency by
the DEMATEL method. Next, the proposed approach finds an index
value and prioritizes investment projects based on this value by
using both relationships among technologies and the foreign trade
deficit ratio in invested technology. Finally, a case study is pre-
sented to verify the usefulness of the proposed approach.
This study has two limitations. First, patent databases available
online, such as United States Patent and Trademark Office (USPTO)
database, do not generate the number of citations for each patent.
It is not possible to compute the number of citations manually due
to the fact that there is a need to perform a large amount of effort
generally and it is quite time consuming. Therefore, it is necessary
to use special software to compute the number of patent citations
for an investment. Second, it is not easy to calculate foreign trade
deficit ratio in the proposed approach. Because, the classification
system used by patent databases to define the invested technology
may not match exactly the classification system used in the coun-
try invested.
Future attempts should be made to extend the proposed
approach as well. For example, the DEMATEL method can be used
to identify the impact of the firms on another by using the fre-
quency of citation from one firm to one another. In addition, the
DEMATEL method can also be conducted to find the relationship
among industries by using patent citation flow of technology
across industries. There may be some risks for particular invest-
ments as well. Therefore, the possible risks can be taken into
account and assessed in future studies.
Acknowledgments
The authors would like to thank the editor-in-chief, Prof. B. Lin
and the two anonymous reviewers for their insightful comments
and suggestions that have significantly improved the paper.
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