Showing 1 - 10 of 15,004
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. …
Persistent link: https://www.econbiz.de/10010266004
The real options tradition originally predicted a decreasing relationship between uncertainty and investment, through … the positive effect of higher uncertainty on the trigger level for revenue relative to costs. An opposing effect on the … probability is not the best measure of investment. The sign of the total effect is again ambiguous. This ambiguity is illustrated …
Persistent link: https://www.econbiz.de/10010320899
's 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 …
Persistent link: https://www.econbiz.de/10011325118
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 …
Persistent link: https://www.econbiz.de/10010271966
how capital tax uncertainty affects investment timing. However, it is well known that both uncertainty and capital tax may … stochastic taxation contribute to overall uncertainty and may significantly affect investment decisions. Hitherto, it is unknown … be harmful for investment and decelerate investment activities. We are the first to study the investment timing effects …
Persistent link: https://www.econbiz.de/10011522546
The purpose of this paper is to analyze the influence of uncertainty on the value of real options while allowing for a … uncertainty does not hold, if the value of the underlying asset changes due to a Variation of the Standard deviation. Only if the … uncertainty can be retained. In all other cases, the influence becomes ambiguous. In addition, we discuss the consequences of our …
Persistent link: https://www.econbiz.de/10011558716
not precise about its timing. A model of waiting and growth options seizes the importance of flexibility to FDI decisions … and centers the impact of uncertainty. The results of a panel study using aggregates of 5379 German entries to 22 … countries suggest that uncertainty has a U-shaped influence on the probability of entry and a negative effect on the amount of …
Persistent link: https://www.econbiz.de/10010295803
opportunities. If investors can react to uncertainty the degree of irreversibility and timing flexibility inherent in the available …In entrepreneurial decisions making uncertain future profits often are a main characteristics of real investment … profit taxation and real options. We model an investment decision including an option to invest and an option to abandon. We …
Persistent link: https://www.econbiz.de/10010300880
The role of product market reforms in achieving the objective of higher employment and growth has recently received much attention amongst academics. The aim of this paper is to analyse some of the channels through which cross-market effects come about and to assess their policy relevance. The...
Persistent link: https://www.econbiz.de/10010271923
We derive robust predictions on the effects of uncertainty on short run investment dynamics in a broad class of models … of the capital stock is ambiguous. An investment model is estimated to test these theoretical predictions using a panel … of UK firms and a stock returns-based measure of uncertainty. As predicted we find that uncertainty reduces firms …
Persistent link: https://www.econbiz.de/10010293014