Real Options and International Investment

Edited by the late Alan M. Rugman, formerly Henley Business School, University of Reading, UK and Jing Li, Assistant Professor of International Business, Simon Fraser University, Canada

'A common criticism of economic theory is that its approach is static rather than dynamic, and that it ignores the impact of uncertainty on decisions. Real option theory shows that this criticism is unfounded. Real option theory explores the logic of flexibility - a crucial aspect of corporate strategy in a volatile and competitive environment. The editors have done a brilliant job in bringing together key contributions within a clear and logical structure. This book is an essential reference source for anyone working in this exciting area of research.'

• Contents:AcknowledgementsIntroduction Alan M. Rugman and Jing LiPART ITHE REAL OPTIONS APPROACH TO INTERNATIONAL BUSINESS AND STRATEGY 1. Peter J. Buckley, Mark Casson and Mohammed Azzim Gulamhussen (2002), ‘Internationalisation – Real Options, Knowledge Management and the Uppsala Approach’2. Peter J. Buckley and Mark C. Casson (1998), ‘Models of the Multinational Enterprise’3. Ron Adner and Daniel A. Levinthal (2004), ‘What is Not a Real Option: Considering Boundaries for the Application of Real Options to Business Strategy’PART IIAPPLICATIONS OF REAL OPTIONS TO MULTINATIONAL AND OPERATIONAL FLEXIBILITY 4. Alan M. Rugman (1976), ‘Risk Reduction by International Diversification’5. Bruce Kogut and Nalin Kulatilaka (1994), ‘Operating Flexibility, Global Manufacturing, and the Option Value of a Multinational Network’6. José Manuel Campa (1994), ‘Multinational Investment Under Uncertainty in the Chemical Processing Industries’7. Subramanian Rangan (1998), ‘Do Multinationals Operate Flexibly? Theory and Evidence’8. Kent D. Miller and Jeffrey J. Reuer (1998), ‘Firm Strategy and Economic Exposure To Foreign Exchange Rate Movements’9. Jeffrey J. Reuer and Michael J. Leiblein (2000), ‘Downside Risk Implications of Multinationality and International Joint Ventures’PART IIIREAL OPTIONS AND MARKET ENTRY MODES 10. Bruce Kogut (1991), ‘Joint Ventures and the Option to Expand and Acquire’11. Tailan Chi and Donald J. McGuire (1996), ‘Collaborative Ventures and Value of Learning: Integrating the Transaction Cost and Strategic Option Perspectives on the Choice of Market Entry Modes’12. Timothy B. Folta (1998), ‘Governance and Uncertainty: The Trade-off Between Administrative Control and Commitment’13. Tailan Chi (2000), ‘Option to Acquire or Divest a Joint Venture’PART IVREAL OPTIONS AND MARKET ENTRY TIMING 14. Peter J. Buckley and Mark Casson (1981), ‘The Optimal Timing of a Foreign Direct Investment’15. Pietra Rivoli and Eugene Salorio (1996), ‘Foreign Direct Investment and Investment Under Uncertainty’16. Timothy B. Folta and Kent D. Miller (2002), ‘Real Options in Equity Partnerships’17. Timothy B. Folta and Jonathan P. O’Brien (2004), ‘Entry in the Presence of Dueling Options’PART VREAL OPTIONS AND STRATEGIC MANAGEMENT 18. Edward H. Bowman and Dileep Hurry (1993), ‘Strategy Through the Option Lens: An Integrated View of Resource Investments and the Incremental-Choice Process’19. Rita Gunther McGrath (1997), ‘A Real Options Logic for Initiating Technology Positioning Investments’20. Bruce Kogut and Nalin Kulatilaka (2001), ‘Capabilities as Real Options’Name Index