Appraising the Foreign Investment Decision Available to Purchase

Managers may be motivated to invest abroad for a variety of reasons. They may feel “compelled” to make such investments because of lack of opportunities in the domestic market, or because competitors have set up manufacture abroad, thereby making exports less competitive. Alternatively, it may be the logical progression of a growing business. How should managers approach foreign investment decisions? Are they very different from domestic investments? What are the additional hazards to consider? This article sets out to discuss these problems and provides a framework for the evaluation of foreign investments.