The Timing of FDI Under Uncertainty: An Application to the US Multinational Enterprises.

An 'option-pricing' model is employed to analyse when a firm should expand its production capabilities abroad. In a framework where the firm's profit are determined by some average of the attractiveness of the home and foreign countries, and attractiveness in each country follow differentiated Brownian motions, this paper derives an optimal trigger value for FDI.

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Year of publication:	2001
Authors:	Sampayo, F.D.M.
Institutions:	Department of Economics, University of Birmingham
Subject:	FOREIGN INVESTMENTS \| PRICING \| ECONOMIC MODELS

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Series:	Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	42 pages
Classification:	C13 - Estimation ; C23 - Models with Panel Data ; D81 - Criteria for Decision-Making under Risk and Uncertainty ; F23 - Multinational Firms; International Business
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005086697