Options, Timing, and Regional Entry of Firms
This paper studies how the possibility to postpone the unrecoverable entry and location cost affects regional entry when post-entry earnings are uncertain. We find that the opportunity cost to enter today is higher when entering a region with high uncertainty relative to a region with low uncertainty.
|Date of creation:||21 Apr 1999|
|Contact details of provider:|| Postal: Department of Economics, Umeå University, S-901 87 Umeå, Sweden|
Phone: 090 - 786 61 42
Fax: 090 - 77 23 02
Web page: http://www.econ.umu.se/
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- Robert S. Pindyck, 1990.
"Irreversibility, Uncertainty, and Investment,"
NBER Working Papers
3307, National Bureau of Economic Research, Inc.
- Pindyck, Robert, 1989. "Irreversibility, uncertainty, and investment," Policy Research Working Paper Series 294, The World Bank.
- Pindyck, Robert S., 1990. "Irreversibility, uncertainty, and investment," Working papers 3137-90., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Elisabet Berglund & Kurt Brännäs, 2001.
"Plants' entry and exit in Swedish municipalities,"
The Annals of Regional Science,
Springer;Western Regional Science Association, vol. 35(3), pages 431-448.
- Dixit, A., 1988.
"Entry And Exit Decisions Under Uncertainty,"
91, Princeton, Department of Economics - Financial Research Center.
- Berglund, Elisabet, 1999. "Human Capital and Regional Entry of Firms," Umeå Economic Studies 500, Umeå University, Department of Economics.
- Robert McDonald & Daniel Siegel, 1986. "The Value of Waiting to Invest," The Quarterly Journal of Economics, Oxford University Press, vol. 101(4), pages 707-727.
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