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Lukas, E., (2007). Dynamic market entry and the value of flexibility in transitional international joint ventures, Review of Financial Economics, 16, pp. 91-110.

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Article

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

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


Journal of Finance and Economics. 2014, Vol. 2 No. 3, 70-74
DOI: 10.12691/jfe-2-3-3
Copyright © 2014 Science and Education Publishing

Cite this paper:
F. Calò, 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.

Correspondence to: F.  Pizzutilo, Department of Business and law studies, University of Bari “Aldo Moro”, Bari, Italy. Email: ; fabio.pizzutilo@uniba.it

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