Low investment rates are a puzzling phenomenon particularly in transition economies with an urgent need for modernisation. The literature offers two alternative explanations: imperfect capital markets and investment reluctance due to real options effects. In this paper, we develop a generalised...

In this paper we analyse the timing of disinvestment decisions by applying a real options approach to explain the experimentally observed disinvestment behaviour of agricultural entrepreneurs. Within this framework the tendency to postpone exit and termination choices can be rationalised. The...