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Description of the research question /s addressed and more specific hypotheses (if any) proposed.
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The work was published by Esteban Garcia-Canal and Mauro F. Guillen of the Warton School, University of Pennsylvania, Philadelphia, Pennsylvania and Facultad de Ciencias Economicas y Empresariales, Universidad de Oviedo, Oviedo Spain. In the paper the author propose four separate hypothesis:
Hypothesis 1: Hypothesis 1:Macroeconomic uncertainty in the host country discourages entry by foreign firms.
This hypothesis states that many countries who wish to enter into foreign markets may not do so because of the macroeconomics in that country.
Direct Quote: "A specialized branch of the literature on international investment decisions known as the hysteresis
hypothesis shows that when faced by uncertainty in the economic environment the best strategy is to wait and see".
Hypothesis 2a: Policy instability due to a lack of institutional constraints on the executive branch of government in the host country discourages entry by foreign firms.
This hypothesis states that many foreign countries or firms do not enter into the host country market due to the unstability of the politics held in the host country.
Direct Quote: "The concept of 'policy instability' refers to the likelihood that the government might change the rules
of the game in a way that adversely affects the interests of the foreign entrant".
Hypothesis 2b: In ...
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