Expropriation and the firm's decision to operate abroad

This is a study of the impact of the political environment on the foreign direct investment (FDI) decisions of U.S. firms that operate in Sub Saharan African countries. The study provides a qualitative and quantitative analysis of the determinants of FDI decisions based on Kobrin and Minor's expropriation data base with emphasis on the role of political variables such as perceived risk, political instability, political violence, and expropriation on FDI decision outcomes. A number of case studies of U.S. multinational corporations operating in Sub Saharan Africa are examined. Several hypotheses are tested empirically and explored for the implications they raise for rational choice decision making in U.S. MNCs.