 The Optimal Timing of a Foreign Direct InvestmentPeter J. Buckley and Mark Casson Chapter 5 in The Economic Theory of the Multinational Enterprise, 1985, pp 98-112 from Palgrave Macmillan Abstract: Abstract Analyses of the optimal timing of foreign direct investment (FDI) decisions have been curiously lacking in the general literature on multinational enterprises (see Chapter 1). Although comparative static analyses exist, comparing exporting to the host country with market servicing from a production unit sited in the host country (Horst, 1971; Hirsh, 1976) the only attempt to predict the timing of the switch from exporting to foreign-based production is that of Aliber (1970) (although Vernon, 1966, gives a cost-based rationale for the switch). This chapter attempts to fill this gap in the theory of FDI. Section 5.2 outlines and criticises previous attempts to deal with the problem, Sections 5.3–5.5 present a simple model, which ignores set-up costs, and Sections 5.6 and 5.7 give a more detailed analysis including such costs. Further extensions of the theory are considered in Section 5.8 and the conclusions are summarised in Section 5.9. The problem emerges as being more complex than had previously been appreciated. Keywords: Foreign Direct Investment; Host Country; Variable Cost; Demand Curve; Market Service (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-05242-4_5 Ordering information: This item can be ordered from DOI: 10.1007/978-1-349-05242-4_5 Access Statistics for this chapter More chapters in Palgrave Macmillan Books from Palgrave Macmillan |
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