The role of information in the competition for FDI under uncertainty

This paper mainly focuses on the role of information in the competition for FDI when host countries are not sure of the “fixed cost” differences MNEs are working with to make FDI in different countries. It is found in this paper that as the public information increases and the uncertainty declines, host countries will first provide more and more subsidies to compete for FDI, which will reduce their welfare; then after the current uncertainty has been reduced to a relatively low level, any further reduction in uncertainty will pull down their subsidies and increase their welfare.