The Timing of FDI Under Uncertainty: An Application to the US Multinational Enterprises
AbstractAn '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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Bibliographic InfoPaper provided by Department of Economics, University of Birmingham in its series Discussion Papers with number 01-04.
Length: 42 pages
Date of creation: 2001
Date of revision:
FOREIGN INVESTMENTS ; PRICING ; ECONOMIC MODELS;
Find related papers by JEL classification:
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