Chen, Yu-Fu

Funke, Michael

English

In this paper we analyse the impact of policy uncertainty on foreign direct investment strategies. We also consider the impact of economic integration upon FDI decisions. The paper follows the real options approach, which allows investigating 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 while economic integration leads to an increasing benefit of investing abroad

University of Dundee Online Publications

Challenges to the Practical Implementation of Modeling and Valuing Real Options”,

Corruption and Growth”,

Economic Growth in a Cross-Section of Countries”,

Economic Instability and Aggregate Investment”, in:

Exploiting Uncertainty: The Real-Options Revolution in Decision Making“,

Foreign direct Investment and Forward Hedging”,

Foreign Direct Investment in Russia´s Regions 1993-95. Why so Little and where Has It Gone?,

Foreign Direct Investment, Exchange Rate Variability and Demand Uncertainty”,

Hysteresis in Import Prices: The Beachhead Effect”,

Income Distribution, Political Instability and Investment”,

Institutions and Economic Performance: Cross-Country Tests Using Alternative Institutional Measures”,

Investment and Institutional Uncertainty:

Investment with Uncertain Tax Policy: Does Random Tax Policy Discourage Investment?”,

Irreversibility and Aggregate Investment”,

Irreversibility, Uncertainty, and Cyclical Investment”,

Martingales and Arbitrage in Multiperiod Securities Markets”,

Numerical Recipes in C++: The Art of Scientific Computing, 2nd edition, Cambridge

Persistent Trade Effects of Large Exchange Rate Shocks“,

Policy Uncertainty and Private Investment in Developing Countries”,

Policy Uncertainty, Persistence and Growth”,

Political Risk, Institutions and Foreign Direct Investment”,

Pricing the Cost of Expropriation Risk”,

Real Operating Options and Foreign Direct Investment: A Synthetic Approach”,

Real Options – A Practitioner´s Guide,

Real Options in Multinational Corporations: Organizational Challenges and Risk Implications”,

Real Options: Managing Strategic Investment in an Uncertain World,

Shipping Costs, Manufactured Exports and Economic Growth”,

The Globalisation of Business: The Challenge of the 1990s,

The Optimal Timing of a Foreign Direct Investment”,

The Potential Magnitude and Impact of FDI Flows in CEECs”,

The Theory and Practice of Corporate Finance. Evidence from the Field”,

Trade Reform,

Trade Reorientation and Recovery in Transition Economies”, The Oxford Review of

Transportation Costs and International Trade in the Second Era of Globalization”,

Waiting to Invest: Investment and Uncertainty”,

What Moves Capital to Transition Economies?”,

Dundee Discussion Papers in Economics 208:Political risk, economic integration, and the foreign direct investment decision

https://discovery.dundee.ac.uk/files/107602/DDPE_208.pdf

Dundee Discussion Papers in Economics 208:Political risk, economic integration, and the foreign direct investment decision

Abstract

Similar works

Full text

Available Versions

University of Dundee Online Publications

University of Dundee Online Publications