The Distributional Efficiency of Alternative Regulatory Regimes: A Real Option Approach
AbstractThis paper studies the effects of regulatory constraints on firm's irreversible investment decisions. The RPI - x rule is compared to a profit sharing rule, which increases the x factor in case profits go beyond a given level. When the firm has an option to delay investment, these rules have the same impact on investment choices. As profit sharing has a greater ability to extract rents, however, it is more efficient than the RPI - x rule. Copyright 2003 by Kluwer Academic Publishers
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Bibliographic InfoArticle provided by Springer in its journal International Tax and Public Finance.
Volume (Year): 10 (2003)
Issue (Month): 4 (August)
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Web page: http://www.springerlink.com/link.asp?id=102915
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- Michele Moretto & Paolo M. Panteghini & Carlo Scarpa, 2003.
"Investment Size and Firm’s Value Under Profit Sharing Regulation,"
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- Stroffolini, Francesca, 2012. "Access profit-sharing regulation with information acquisition and transmission," Research in Economics, Elsevier, vol. 66(2), pages 161-174.
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