Option Value, Policy Uncertainty, and the Foreign Direct Investment Decision

In this paper we analyse the impact of policy uncertainty on foreign direct investment strategies. The paper follows the real options approach, which allows to investigate the value to a firm of waiting to invest and/or disinvest, when payoffs are stochastic due to political uncertainty and investments are partially reversible. Across the board we find that political uncertainty can be very detrimental to FDI decisions

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Year of publication:	2003
Authors:	Chen, Yu-Fu ; Funke, Michael
Publisher:	[S.l.] : SSRN
Subject:	Auslandsinvestition \| Foreign investment \| Theorie \| Theory \| Realoptionsansatz \| Real options analysis \| Politische Instabilität \| Political instability \| Investitionsentscheidung \| Investment decision \| Risiko \| Risk

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Extent:	1 Online-Ressource (23 p)
Type of publication:	Book / Working Paper
Language:	English
Notes:	Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments 2003 erstellt
Other identifiers:	10.2139/ssrn.419701 [DOI]
Classification:	D81 - Criteria for Decision-Making under Risk and Uncertainty ; D92 - Intertemporal Firm Choice and Growth, Investment, or Financing ; E22 - Capital; Investment (including Inventories); Capacity ; F21 - International Investment; Long-Term Capital Movements
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10014078132