Antecedents of FDI options by Thai public firms

Purpose – This paper aims to develop and test a real-options model investigating the antecedents predicting the types of options exercise (i.e. growth, delay and exit options) by multinational enterprises (MNEs) after their initial foreign direct investment (FDI) announcements. Firm-, industry- and country-specific factors that influence the real options’ processes and different subsequent options to exercise were examined. Design/methodology/approach – Binomial and multinomial logistic regressions were performed on the data collected from 281 pairs of initial FDI (mostly within Asia) announcements and subsequent announcements regarding further investment decisions by 41 Thai MNEs listed in the Securities Exchange of Thailand for 1995-2005. Findings – The empirical evidence shows that host country factors (i.e. economic growth rate and economic freedom), industry competition and ownership concentration have significant effects on the MNEs’ further decisions on whether to grow, delay or exit out of their i...