Modeling international investment decisions for financial holding companies

Charles V. Trappey*, Tsui Yii Shih, Amy J.C. Trappey

*Corresponding author for this work

Research output: Contribution to journalArticle

7 Scopus citations

Abstract

This research analyzes the internationalization process model developed by Johanson and Vahlne and derives two integer programming investment decision models that consider the risk attitudes of investment firms. Johanson and Vahlne's model provides a starting point for building a model that suits the investment approach and decision making process of financial holding companies. In practice, when firms make an international investment decision, there is a need for a model that can generate outputs based on financial measures such as profit, investment returns, and tolerable levels of risk. Thus, in this paper, Johanson and Vahlne's concepts are studied and financial managers are interviewed to derive models that match the investment decision procedures of the firms. The model helps firms manage the risks of their investments and derive accurate investment strategies based on investment objectives and constraints.

Original languageEnglish
Pages (from-to)800-814
Number of pages15
JournalEuropean Journal of Operational Research
Volume180
Issue number2
DOIs
StatePublished - 16 Jul 2007

Keywords

  • Financial holding companies
  • Integer programming
  • Internationalization process model
  • Investment decision model
  • Market commitment
  • Market knowledge

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