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|
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- Berglund, Elisabet & Brännäs, Kurt, 1999.
"Plants' Entry and Exit in Swedish Municipalities,"
Umeå Economic Studies
497, Umeå University, Department of Economics.
- Pindyck, Robert S., 1990.
"Irreversibility, uncertainty, and investment,"
3137-90., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Berglund, Elisabet, 1999. "Human Capital and Regional Entry of Firms," Umeå Economic Studies 500, Umeå University, Department of Economics.
- Dixit, A., 1988.
"Entry And Exit Decisions Under Uncertainty,"
91, Princeton, Department of Economics - Financial Research Center.
- McDonald, Robert & Siegel, Daniel, 1986. "The Value of Waiting to Invest," The Quarterly Journal of Economics, MIT Press, vol. 101(4), pages 707-27, November.
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