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
Date Written: March 26, 2014
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: Suggested Citation