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Uncertainty, Capital Investment, and Risk Management
Doshi, Hitesh - 2017
firm-level capital investment, risk management, and debt issuance. The effects of uncertainty vary significantly by firm … capital investment is significantly weaker for firms that hedge their output price risk. Our analysis highlights that, in the … ability to hedge risk exposures …
Persistent link: https://www.econbiz.de/10012974060
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Volume Uncertainty in Construction Projects : A Real Options Approach
Ribeiro, João Adelino - 2019
The levels of uncertainty surrounding construction projects are particularly high and construction managers should be aware that adequately managing the effects of the different types of uncertainty may lead to an increase in the overall performance of construction companies. The model proposed...
Persistent link: https://www.econbiz.de/10012905341
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Discount Rate Uncertainty and Capital Investment
Bessembinder, Hendrik; H. Décaire, Paul - 2021
Firms obtain noisy estimates of investors' required rates of return (discount rates) using market-based information. Discounted-cash-flow (DCF) methods, as commonly taught in MBA courses, lead to upward-biased estimates of project values in the presence of such noise, even when cash flow and...
Persistent link: https://www.econbiz.de/10013251697
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Threshold theory : modelling risk attitude
Kasprowicz, Tomasz; Bednorz, Andrzej - In: E-Finanse : finansowy kwartalnik internetowy 13 (2017) 4, pp. 97-109
how the agent’s risk attitude affects his decisions. This “Threshold Theory” framework is based on a real options approach … influence the agent’s risk attitude. The theory’s predictions help to explain many anomalies that the standard expected utility …In this paper we offer an alternative framework for examining why risk matters in the decisions of economic agents, and …
Persistent link: https://www.econbiz.de/10011900005
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Willingness to Invest and Time Indifference Under Uncertainty and Taxes
Sureth-Sloane, Caren; Voß, Armin - 2006
's disposition towards realizing an investment project under risk aversion. We show that capital gains taxation often reduces this …
Persistent link: https://www.econbiz.de/10014057859
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Uncertainty, flexible labour relations and R&D expenditure
Di Cintio, Marco; Grassi, Emanuele - 2013
&D outlays. Moreover, as predicted by the real options theory, our results suggest that product market uncertainty reduces R …
Persistent link: https://www.econbiz.de/10011527188
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Do plants freeze upon uncertainty shocks?
Mecikovsky, Ariel M.; Meier, Matthias - 2014 - Preprint, This version: August 28, 2014, (Preliminary version)
Following the real option literature, whether or not uncertainty shocks drive business cycles depends on the degree of adjustment frictions. The more plants freeze and remain inactive in response to increased uncertainty, the stronger the adverse effects on the economic activity. Using quarterly...
Persistent link: https://www.econbiz.de/10010399958
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Investment under Uncertainty and Correlated Privately Known Costs
Dehghani, Mohammad Hossein - 2019
's cost. When market risk increases, the equilibria can exist only when the firm is less certain …
Persistent link: https://www.econbiz.de/10012905574
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Uncertainty over uncertainty in environmental policy adoption : Bayesian larning of unpredictable socioeconomic costs
Basei, Matteo; Ferrari, Giorgio; Rodosthenous, Neofytos - 2023
The socioeconomic impact of pollution naturally comes with uncertainty due to, e.g., current new technological developments in emissions' abatement or demographic changes. On top of that, the trend of the future costs of the environmental damage is unknown: Will global warming dominate or...
Persistent link: https://www.econbiz.de/10014277005
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Uncertainty, Investment Spikes, and Leverage Adjustments
Im, Hyun Joong - 2020
We study the effects of uncertainty on corporate leverage adjustments with respect to investment spikes and find that overlevered and underlevered firms behave very differently in response to the combination of uncertainty and investment spikes. Overlevered firms facing high uncertainty converge...
Persistent link: https://www.econbiz.de/10012855716