The Sensitivity Analysis of the International Investment Decision Model

Abstract

Johanson and Vahlne's research provides a starting point for building a model that suits general international investments and decision making processes. This research derives an integer programming investment decision model that also considers investment costs and the risk attitudes of firms. The sensitivity analysis of the revised model demonstrates how risk attitudes and investment costs influence the optimal investment decision. Compared to the cost factors, the influ- ence of attitudes toward risk are the key to the overall decision making process.