FDI Location Choices under Uncertainty: A Binomial Options-Based Approach

F. Calò^1, and F. Pizzutilo^2,

¹University of Urbino “Carlo Bo”, Ph.D. candidate in Economics, Society, Law

²Department of Business and law studies, University of Bari “Aldo Moro”, Bari, Italy

Cite this paper

F. Calò and F. Pizzutilo. FDI Location Choices under Uncertainty: A Binomial Options-Based Approach. Journal of Finance and Economics. 2014; 2(3):70-74. doi: 10.12691/JFE-2-3-3

Abstract

The competitive advantages of foreign direct investment can be largely dependent on location. In this study, we develop an innovative model to deal with this crucial step for any multinational involved in expanding its operations abroad. The model has a pure financial perspective and is based on a binomial approach. An application of the model explores its practical implementation and outlines the extent to which different financial variables impact on the location choice of foreign direct investment.

Keywords

location choice, foreign direct investment, FDI, multinational companies, MNC, multinational enterprises, MNE, entry mode choice

Copyright

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

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