search query: @author Itagaki, T. / total: 3
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| Author: | Itagaki, T. |
| Title: | A two-step decision model of the multinational enterprise under foreign demand uncertainty |
| Journal: | Journal of International Economics
1991 : FEB, VOL. 30:1/2, p. 185-190 |
| Index terms: | MULTINATIONAL COMPANIES DECISION MODELS DEMAND UNCERTAINTY INTERNATIONAL TRADE CAPITAL UTILIZATION |
| Language: | eng |
| Abstract: | This paper supposes that while domestic demand is certain, foreign demand is a random variable. It takes into account the two-step decision by a multi-national enterprise /MNE/, that is the possibility that international investment is made ex-ante, and international trade is undertaken ex-post after foreign trade demand is known. The optimal behaviour of a monopolistic MNE is examined under certainty and under uncertainty. It is demonstrated that efficient capital utilization is achieved even under uncertainty; the risk-averse MNE may invest and produce less than the risk-neutral one in both home and host countries. |
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