Foreign Direct Investment in Computerized Business Simulations

Abstract

By definition, foreign direct investment is an investment made under different national governments. However, current literature and research on foreign direct investment have not properly incorporated host-country government policies into the investment decision process. This article develops a theoretical framework to investigate the interaction between policies of the host-country governments and performance of foreign equity investment. Based on the theoretical framework, a computerized simulation model is developed. The model may be used as a tool for analysis of real-world foreign direct investments and as an aid to develop negotiation strategies for foreign direct investments.

Keywords

business negotiation computersimulation financial economics foreign direct investment multinational enterprises risk analysis

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