We investigate the optimal investment timing strategy in a real option framework. Depending on the state of the economy …, whose changes are modeled by a Markov chain, the investment cost can take one of two values. The optimal investment timing … decision is determined by finding the free boundary of a perpetual American option. Three investment timing policies, based on …

This paper uses a yearly dataset of plant-level investment in Colombian firms during the period 1997 to 2007 to assess … significant correlation is found between the boom observed in investment and the adoption of the tax policy. However, the … tests. Overall, it is concluded that the tax stimulus analyzed was ineffective in promoting investment in Colombia. …

We use a yearly dataset of plant level investment in Colombian firms during the period 1997 to 2007, to assess the … statistically significant correlation between the boom observed in investment and the adoption of the tax policy. However the … conclude that the analyzed tax stimulus was ineffective to promote investment in Colombia …