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An entry/exit decision for transnational production system: applying optimal financing behavior

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Abstract

This study introduces the real options approach to construct the decision model of entry (exit) in flexible transnational production systems. The firm value is appraised under the external financing behavior to solve the optimal cross-border financing ratios by transnational production systems. The proposed approach can evaluate effectively the potential investing value before project adopting, invested project value, potential disinvesting value, and salvage of abandon under matching the multinational enterprises financing behavior. How to decide the optimal cross-border financing ratios of the investing operation and disinvesting salvage timing is the point of the research in making of production system entry and exit.

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Authors and Affiliations

  1. Department of International Business, National Dong Hwa University, 1, Sec. 2, Da Hsueh Rd., Shou-Feng, Hualien, 974, Taiwan

    Tyrone T. Lin

  2. Department of International Business, National Dong Hwa University, Hualien, Taiwan

    Yu-hsin Ou

Authors
  1. Tyrone T. Lin
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  2. Yu-hsin Ou
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Correspondence to Tyrone T. Lin.

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Lin, T.T., Ou, Yh. An entry/exit decision for transnational production system: applying optimal financing behavior. Qual Quant 45, 1349–1359 (2011). https://doi.org/10.1007/s11135-010-9337-5

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  • DOI: https://doi.org/10.1007/s11135-010-9337-5

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