Investment in new foreign subsidiaries under receding perception of uncertainty

Jan Hendrik Fisch
Additional contact information
Jan Hendrik Fisch: Lehrstuhl fuer Technologie- und Innovationsmanagement, Zeppelin University, Friedrichshafen, Germany

Journal of International Business Studies, 2008, vol. 39, issue 3, 370-386

Abstract: Research on foreign direct investment has focused considerable attention on the moment of market entry, but less on the dynamics of investment in the post-entry phase. This paper centres the influence of uncertainty on investment, and develops a growth options model to explain the sequence of investment in new foreign subsidiaries. In a learning process that starts at entry, investors perceive receding levels of uncertainty and shift their reason for investment from option values towards net present values. The findings of a panel study of 634 German subsidiaries support the propositions and reveal the potential of the real options approach to improve the understanding of internationalisation processes. Journal of International Business Studies (2008) 39, 370–386. doi:10.1057/palgrave.jibs.8400362

Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
http://www.palgrave-journals.com/jibs/journal/v39/n3/pdf/8400362a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/jibs/journal/v39/n3/full/8400362a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:jintbs:v:39:y:2008:i:3:p:370-386

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/41267/PS2

Access Statistics for this article

Journal of International Business Studies is currently edited by John Cantwell

More articles in Journal of International Business Studies from Palgrave Macmillan, Academy of International Business
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().