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Journal of International Business Studies

, Volume 27, Issue 2, pp 335–357 | Cite as

Foreign Direct Investment and Investment under Uncertainty

  • Pietra Rivoli
  • Eugene Salorio
Article

Abstract

We show that in uncertain environments ownership and internalization advantages may be negatively rather than positively associated with FDI. This reversal from extant theory occurs because ownership advantages often serve to make FDI delayable, while internalization advantages often serve to make it less reversible. When FDI becomes either more delayable or less reversible, it is less likely to occur at a point in time. Our approach enriches the “who,” “where” and “why” explanations offered by current FDI theory to incorporate the question of “when.”

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Copyright information

© Academy of International Business 1996

Authors and Affiliations

  • Pietra Rivoli
    • 1
  • Eugene Salorio
    • 2
  1. 1.Georgetown University and University College Dublin
  2. 2.Georgetown University

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