Graduation Semester and Year




Document Type


Degree Name

Doctor of Philosophy in Management



First Advisor

Abdul Rasheed


This study investigates international expansion strategies using a real options framework. Decisions to enter foreign markets and their subsequent decision to increase, delay or abandon their commitments are both predicted and evaluated from an options perspective. More specifically, this study attempts to answer the following two questions: (i) How do macro-environmental, industry and firm specific factors impact the real option process of a multinational enterprise (MNE)? (ii) How does the market react to the different option choices? The real options process from the creation of an option to its subsequent exercise was examined along with market reactions following the announcements of these events. The direct and moderating effects of country, industry, and firm specific characteristics were proposed and tested. A sample of 281 international investment announcements and 281 subsequent announcements of further actions was collected from 46 MNEs in the Securities Exchange of Thailand from 1995-2005. The findings indicate that host-country economic growth rate and economic freedom, home-country industry competition, and firm's ownership concentration have significant impacts on the decision to expand the initial investments. Furthermore, initial investment announcements in the form of joint ventures were found to have significant positive market reactions. Interestingly, wholly-owned initial investment announcements were found to have significant negative market reactions. While there was no significant positive market reactions to growth option announcements, delay and exit option announcements were found to have significant negative market reactions as hypothesized. The proposed contextual factors did not yield significant moderating effects on the relationship between options exercise and market valuation. However, supplementary analysis showed significant moderating effects of home-industry competition and executive positions on the relationship between the initial joint venture announcements and market valuation. The results of this study provide evidence of the appropriateness of the real options as a useful perspective for studying international expansion strategies.


Business | Business Administration, Management, and Operations


Degree granted by The University of Texas at Arlington