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Publication Detailed Description
Journal Title
Management International Review
Year (definitive publication)
2009
Language
English
Country
Germany
More Information
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Abstract
The paper models location of banking FDI under volatile demand conditions. In the model, information arrives either through passage of time or though presence in the foreign market. The model is also extended to analyze strategic and simultaneous FDI.
The results show that market entry evolves from deferring FDI to partial FDI and only then to full FDI. The switch to partial FDI occurs faster when banks can gather information only through a presence in the foreign market. The switch to partial FDI does not occur when immediate full FDI enables more efficient production. The results are at odds with models developed for predictable demand conditions in which banks switch straight from deferring FDI to full FDI. The paper generates an integrated view of the location of banking FDI.
Acknowledgements
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Keywords
FDI,Banks,Probability theory,Real options,Games
Fields of Science and Technology Classification
- Economics and Business - Social Sciences
Contributions to the Sustainable Development Goals of the United Nations
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