Exchange rate uncertainty, futures markets, and foreign direct investment

摘要: In this thesis, I consider a multinational firm (MNF) which produces and sells in domestic foreign markets with monopolistic power both markets. The purpose of the study is to analyze production, hedging, investment decisions under exchange rate uncertainty. timing firm's attitude toward risk are crucial components determining effect risk. Assuming that some made uncertainty, while other certainty, examine how uncertainty affects output decisions, extend case when transportation costs exist. It shown for neutrality, on total depends upon shape demand curves. presence costs, makes neutral produce more plant. Furthermore, availability futures encourages averse plant except perceived as upwardly biased, it less than certainty absence addition, optimal position short linear demands unbiased markets, full hedging contract only cannot be attained nonlinear profit model. also issue direct investment. model MNF may open home or plants, its choice depending yields higher expected profits. If price responsive, likely fixed output. faces competitor market, if does not plant, firms benefit from However, raises value opening thus induces it, reducing local