Journal of Finance and Economics
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Journal of Finance and Economics. 2014, 2(3), 70-74
DOI: 10.12691/jfe-2-3-3
Open AccessResearch Article

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

F. Calò1, and F. Pizzutilo2,

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

Pub. Date: March 16, 2014
(This article belongs to the Special Issue Multinational Capital Budgeting)

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


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.

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

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