Aray, Henry; Gardeazabal, Javier - In: Journal of International Money and Finance 29 (2010) 6, pp. 1171-1191
We analyze a model where an exporting firm competes a la Cournot in a foreign market. The firm faces exchange rate uncertainty and has the option to invest abroad. The paper contributes four results. First, real option pricing techniques are used to derive the optimal timing rule of the...