International monopoly under uncertainty Aray, Henry Exchange rate uncertainty Real option Taxation Labor cost A domestic monopolistic firm has the option to service a foreign market through export or by setting up a plant in the host country under exchange rate uncertainty. We analyze the effect of the parameters of the demand and cost functions on hysteresis. We also show results on the effect of taxation and labor cost in attracting or avoiding relocation. We find that when the firm is multinational it pays more taxes. Much more importantly, a tax rate reduction is effective in attracting investment and avoiding relocation. When the firm is multinational it also incurs lower labor costs. However, labor cost is not determinant in the location of production. 2014-04-30T12:53:14Z 2014-04-30T12:53:14Z 2007 info:eu-repo/semantics/report Aray, H. International monopoly under uncertainty. Universidad de Granada. Departamento de Teoría e Historia Económica (2007). (The Papers; 07/05). [http://hdl.handle.net/10481/31501] http://hdl.handle.net/10481/31501 eng The Papers;07/05 http://creativecommons.org/licenses/by-nc-nd/3.0/ info:eu-repo/semantics/openAccess Creative Commons Attribution-NonCommercial-NoDerivs 3.0 License Universidad de Granada. Departamento de Teoría e Historia Económica