An analytic hierarchy process based simulation model for entry mode decision regarding foreign direct investment |
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Authors: | Reuven R. Levary Ke Wan |
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Affiliation: | Department of Decision Sciences and MIS, School of Business and Administration, 3674 Lindell Blvd., St. Louis, MO 63108, USA |
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Abstract: | A methodology is developed for ranking entry mode alternatives encountered by individual firms considering foreign direct investment (FDI). The methodology deals with the risks and uncertainties related to FDI. The analytic hierarchy process (AHP) is used to solve the multiple criteria decision-making problem using input from a firm's management. A simulation approach is incorporated into the AHP to handle the uncertainty considerations encountered in an FDI environment. The uncertainties include: (1) uncertainty regarding the future characteristics of the FDI decision making environment, (2) uncertainty associated with the decision maker's judgment regarding pairwise comparisons necessitated by the AHP. |
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Keywords: | Entry mode Foreign direct investment Analytic hierarchy process Simulation |
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