Foreign Direct Investment: The Incentive to Expropriate and the Cost of Expropriation Risk

摘要: This chapter examines the firm's cost of expropriation risk in a framework that links it to government's incentive expropriate. Using standard methods stochastic calculus, value government is modeled as function Foreign Direct Investment, which fluctuates randomly over time. The firm an insurance policy pays off all net losses resulting from expropriation. It shown depends on how host perceives will incur Incomplete information brings out give and take between found game theoretic models.