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A theory of foreign investment: Possibility, modes and timing
Author(s) -
Jalilian H.
Publication year - 1996
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/(sici)1099-1468(199605)17:3<331::aid-mde772>3.0.co;2-y
Subject(s) - joint venture , foreign direct investment , investment (military) , economics , differential (mechanical device) , production (economics) , variable (mathematics) , microeconomics , transfer (computing) , monetary economics , variable cost , industrial organization , macroeconomics , commerce , mathematics , engineering , computer science , parallel computing , mathematical analysis , politics , political science , law , aerospace engineering
This paper analyzes the possibility, modes and timing of foreign investment and it is shown that all these are simultaneously determined. The determining variables are differential efficiency and variable cost of operation, together with export and technology transfer costs, as well as costs/benefits which are generally associated with differences in production environment originating from both home and/or host countries. The modes considered are: Foreign Direct Investment and Joint Venture, although the method could be generalized to take into account other modes.