Foreign Direct Investment and Real Options

1.Use transfer, control, or operational risk to explain how TIkTok was affected by political risk.

2. Since the NAFTA was established, many Asian firms especially those from Japan and South Korea made extensive FDI in Mexico. Why do you think these Asian firms decided to build production facilities in Mexico?

3. Why do you think the host country tends to resist cross-border acquisitions, rather than green field investments?

4. How is the option to abandon a project similar to a put option?