Abstract

When an international investment opportunity seizes a potential investor's attention, he starts searching for information to buttress his decision. The decision-making process is more complicated for international than for domestic investments because of greater uncertainty about foreign environments. A choice of the alternatives to invest in a given country or not is difficult because a decision depends upon conditions which cannot be foreknown. Conditions affecting the outcome of these alternatives include market potential, production costs, government policy towards expropriation and capital repatriation, competitive pressures, investment regulations and general economic conditions, to name a few. Lack of information about these conditions constrains the decision-maker and may cause him to decide not to invest, a not too infrequent occurrence where developing countries are concerned. A number of developing countries have created machinery for reducing the uncertainties of a decision to invest in them.