This paper focuses on how uncertainty about the sustainability of reform policies could affect the irreversible investment decisions of a tradable sector firm. Demand, costs and productivity are stochastic and are correlated with real exchange rate trends for the firm producing a tradable good....

Ghanaian manufacturing firms face a highly risky environment. Firms may attempt to manage these risks by undertaking production, input, and investment strategies designed to lower profit variability. Mean-variance analysis implies, however, that these strategies involve a trade-off with lower...