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Leverage Dynamics and Financial Flexibility
Bolton, Patrick - 2020
We develop a q theory of investment with endogenous leverage, payout, hedging, and risk-taking dynamics. The key … seeks to preserve its financial flexibility by prudently managing its leverage and investment. Paradoxically, it is the high …
Persistent link: https://www.econbiz.de/10012479326
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Investment Under Uncertainty and the Value of Real and Financial Flexibility
Bolton, Patrick - 2014
alter the standard real options results, with the financial flexibility conferred by internal funds acting as a complement …, and at times as a substitute, to the real flexibility given by the optimal timing of investment. We show that: 1) the … be convex in liquidity) due to the interaction between financial and real (growth/abandonment) flexibility; 3) with …
Persistent link: https://www.econbiz.de/10012458055
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Market Design in Cap and Trade Programs : Permit Validity and Compliance Timing
Holland, Stephen P. - 2012
Cap and trade programs have considerable heterogeneity in permit validity and compliance timing. For example, permits have different validity across time (e.g., banking, borrowing, and seasons) and space (e.g., zonal restrictions), and compliance timing can be annual, in overlapping cycles, or...
Persistent link: https://www.econbiz.de/10012460561
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Intermediaries in International Trade : Direct versus indirect modes of export
Bernard, Andrew B. - 2011
This paper examines the factors that give rise to intermediaries in exporting and explores the implications for trade volumes. Export intermediaries such as wholesalers serve different markets and export different products than manufacturing exporters. In particular, high market-specific fixed...
Persistent link: https://www.econbiz.de/10012460946
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On the Connections between Intertemporal and Intra-temporal Trades
Ju, Jiandong - 2011
This paper develops a new theory of international economics by introducing Heckscher-Ohlin features of intra … account towards its long-run equilibrium. We present empirical evidence consistent with the theory …
Persistent link: https://www.econbiz.de/10012461109
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Offshoring and the Role of Trade Agreements
Antràs, Pol - 2008
The rise of offshoring of intermediate inputs raises important questions for commercial policy. Do the distinguishing features of offshoring introduce novel reasons for trade policy intervention? Does offshoring create new problems of global policy cooperation whose solutions require...
Persistent link: https://www.econbiz.de/10012464361
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Optimal Choice of Product Scope for Multiproduct Firms under Monopolistic Competition
Feenstra, Robert - 2007
In this paper we develop a monopolistic competition model where firms exercise their market power across multiple products. Even with CES preferences, markups are endogenous. Firms choose their optimal product scope by balancing the net profits from a new variety against the costs of...
Persistent link: https://www.econbiz.de/10012464943
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Trading Tasks : A Simple Theory of Offshoring
Grossman, Gene M. - 2006
For centuries, most international trade involved an exchange of complete goods. But, with recent improvements in transportation and communications technology, it increasingly entails different countries adding value to global supply chains, or what might be called "trade in tasks." We propose a...
Persistent link: https://www.econbiz.de/10012465939
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A Model of the Optimal Complexity of Rules
Kaplow, Louis - 1992
Rules often are complex in order to distinguish different types of behavior that may have different consequences. Greater complexity thus allows better control of behavior. But individuals may need to incur costs ex ante to determine how more complex rules apply to their contemplated conduct....
Persistent link: https://www.econbiz.de/10012475023
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A Dynamic Programming Model of Retirement Behavior
Rust, John - 1987
This paper formulates a model of retirement behavior based on the solution to a stochastic dynamic programming problem. The workers objective is to maximize expected discounted utility over his remaining lifetime. At each time period the worker chooses how much to consume and whether to work...
Persistent link: https://www.econbiz.de/10012476597