This paper addresses the issue of how regulatory constraints affect firm s investment choices when the firm has an … option to delay investment. The RPI-x rule is compared to a profit sharing rule, which increases the x factor in case profits … go beyond a given level. It is shown that a pure price cap and profit sharing are identical in their impact on investment …

This article discusses the effects of an asymmetric tax scheme on incremental and sequential investment strategies. The …

so, we depart from the relevant literature, which focuses on fully equity-financed investment project. By letting a … representative firm borrow optimally, we show that debt finance not only encourages investment activities but can also substantially … mitigate the effect of tax rate uncertainty on investment timing. -- capital levy ; corporate taxation ; default risk ; real …

affects both the timing of foreign direct investment decisions and government tax policy. A main finding of the paper is that …

investment of endogenous size. Using a real option approach in continuous time, we show that profit sharing does not affect a … total investment. We also evaluate the reduction in the firm s value due to profit sharing, linking this reduction to the …

The real option theory provides a useful tool to evaluate an R&D investment under uncertainty because, unlike the NPV … (Net Present Value), it considers the managerial flexibility that may be expand the investment opportunity value. However …, most R&D investment projects are open to competing firms in the same industry or line of business, and so the strategic …

In a continuous-time framework we study the technology and investment choice problem of a continuous co … flexible technology allowing for such option. Investment is irreversible and flexibility is costly. The problem is solved … determining in the light of future prospects the optimal revision and then playing backward fixing the investment timing rule …

The paper studies the interaction between cyclical uncertainty and investment in a stochastic real option framework … of the link between cyclical uncertainty and investment is quantified using simulations of the model. The chief … shows that macroeconomic risk acts as an important deterrent to investments. -- business cycles ; real options ; investment …

This article studies the effects of corporate tax asymmetries on irreversible investment. We discuss an asymmetric tax …