The existing literature on dynamic efficiency is deterministic and ignores uncertainty when deriving dynamic efficiency measures, even though it is known that uncertainty affects the optimal adjustment path and the optimal use of quasi-fixed factors. Here, we contribute to closing this gap by...

Investment behavior at the firm level is characterized by lumpy adjustments and frequent periods of inactivity. Low investment rates are particularly puzzling in transition economies where an urgent need of modernization exists. The literature offers two explanations for. Firstly,...

This paper examines the impact of technical efficiency on the optimal exit timing of farms in a stochastic dynamic framework. Starting from a standard real options approach, we incorporate technical efficiency via a production function and derive an optimal price trigger at which farms...