Creane, Anthony; Miyagiwa, Kaz - Institute of Social and Economic Research (ISER), Osaka … - 2007
We examine a foreign firm's choice between exporting and foreign direct investment (FDI) under country-specific cost uncertainty. Unlike exporting, FDI exposes foreign and home firms to common shocks. This results in a correlation of strategies, harming the firms. However, the exposure to common...