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The sensitivity of U.S. multinational companies to institutional and macroeconomic uncertainty: a sectoral analysis

Desbordes, R. (2007) The sensitivity of U.S. multinational companies to institutional and macroeconomic uncertainty: a sectoral analysis. International Business Review, 16 (6). pp. 732-750. ISSN 0969-5931

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Abstract

This paper confronts two alternative approaches for explaining U.S. foreign direct investment (FDI) pattern in developing countries. According to the real options (RO) approach, FDI in capital-intensive industries should be particularly deterred by political and macroeconomic uncertainty. On the other hand, the supply chain risk management (SCRM) approach puts forward that multinational enterprises in vertically integrated industries are unlikely to locate their foreign activities in risky countries. Thanks to the use of sectoral data, it is demonstrated that the SCRM approach explains much better the pattern of U.S. FDI in developing countries than the RO approach.

Item type: Article
ID code: 7226
Keywords: country risk, FDI, multinational enterprises, uncertainty, economic growth, Commerce, Finance, Business and International Management, Marketing
Subjects: Social Sciences > Commerce
Department: Strathclyde Business School > Economics
Related URLs:
    Depositing user: Strathprints Administrator
    Date Deposited: 23 Dec 2008 15:19
    Last modified: 04 Sep 2014 18:19
    URI: http://strathprints.strath.ac.uk/id/eprint/7226

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