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http://hdl.handle.net/10419/19206
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| Title: | | Option Value, Policy Uncertainty, and the Foreign Direct Investment Decision  |
| Authors: | | Chen, Yu-Fu Funke, Michael |
| Issue Date: | | 2003 |
| Series/Report no.: | | HWWA Discussion Paper 234 |
| Abstract: | | 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. |
| Subjects: | | Real options Investment Foreign Direct Investment Political Uncertainty |
| JEL: | | F21 E22 D81 D92 |
| Document Type: | | Working Paper |
| Appears in Collections: | | HWWA Discussion Paper, Hamburgisches Welt-Wirtschafts-Archiv
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