The role of interest rate in investment decisions: a fuzzy logic framework

This paper examines the role of the interest rate in investment decisions for firms in Taiwan. To reflect the human side of decision making and the uncertain nature of information provided, we employ fuzzy set theory and fuzzy logic to examine the nonlinear relationship between these two factors. The results reveal the fact that the interest rate plays an important role in investment decisions. The fuzzy logic theory, replacing the complication model, can explain how the optimisation investment behaviour can be reached.