Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/19206
Authors: 
Chen, Yu-Fu
Funke, Michael
Year of Publication: 
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

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