Publication

The choice and timing of foreign direct investment under uncertainty

Pennings, Enrico
; 
Sleuwaegen, Leo
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Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2004-12
Journal
Economic Modelling
Book
Publication Volume
21
Publication Issue
6
Publication Begin page
1101
Publication End page
1115
Publication Number of pages
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Abstract
This paper sheds new light on why timing and entry mode should be considered simultaneously in the international investment literature. We derive the profit levels at which it is optimal to switch from exporting to setting up a wholly owned subsidiary, creating a joint venture, or licensing production to a local firm. The preferred entry mode depends on uncertainty about future profits, tax differentials between the home and the foreign country, the cost advantages of local firms, institutional requirements, and the degree of cooperation between partners in a joint venture.
Research Projects
Organizational Units
Journal Issue
Keywords
38 Economics, 3801 Applied Economics, 35 Commerce, Management, Tourism and Services, 3507 Strategy, Management and Organisational Behaviour
Citation
Knowledge Domain/Industry
Strategy
DOI
https://doi.org/10.1016/j.econmod.2004.02.003
URI
http://hdl.handle.net/20.500.12127/1555
Other links
https://doi.org/10.1016/j.econmod.2004.02.003
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