FDI Location Choices Under Uncertainty: A Binomial Options-Based Approach

Journal of Finance and Economics (2014), 2(3), pp. 70-74

5 Pages Posted: 27 Mar 2014

See all articles by F. Calò

F. Calò

University of Urbino - Faculty of Economics

Fabio Pizzutilo

Università degli Studi di Bari “Aldo Moro”

Date Written: March 26, 2014

Abstract

The competitive advantages of foreign direct investment can be largely dependent on location. In this study, we develop an innovative model to deal with this crucial step for any multinational involved in expanding its operations abroad. The model has a pure financial perspective and is based on a binomial approach. An application of the model explores its practical implementation and outlines the extent to which different financial variables impact on the location choice of foreign direct investment.

Keywords: location choice, foreign direct investment, FDI, multinational companies, MNC, multinational enterprises, MNE, entry mode choice

JEL Classification: F23, G31, F21

Suggested Citation

Calò, Francesco and Pizzutilo, Fabio, FDI Location Choices Under Uncertainty: A Binomial Options-Based Approach (March 26, 2014). Journal of Finance and Economics (2014), 2(3), pp. 70-74, Available at SSRN: https://ssrn.com/abstract=2416230

Francesco Calò

University of Urbino - Faculty of Economics ( email )

Via Saffi 42
61029 Urbino
Italy

Fabio Pizzutilo (Contact Author)

Università degli Studi di Bari “Aldo Moro” ( email )

largo Abbazia S. Scolastica, 53
Bari, 70124
Italy

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