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Please use this identifier to cite or link to this item:
http://ntur.lib.ntu.edu.tw/handle/246246/63938
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| Title: | Irreversible Investment, Financing, and Bankruptcy Decisions in an Oligopoly |
| Authors: | 周治邦
李丹 |
| Contributors: | 國家發展研究所 |
| Keywords: | bankruptcy;credit spreads;financing;irreversible investment;leverage;oligopoly;real options |
| Date: | 2007-06 |
| Issue Date: | 2007-12-12T01:17:42Z |
| Abstract: | This paper examines a firm’s debt level, investment timing, and investment scale
choices in a continuous-time model where the output price of a good that the firm produces
depends on a stochastic demand-shift variable and the total industry supply of the good.
Using the simple symmetric Cournot–Nash equilibrium assumption that all firms are
identical and therefore follow the same financing and investment strategies, we show that
competition decreases the output price and hence encourages a firm to wait for a higher
demand level before it is profitable to invest. We also demonstrate how uncertainty,
bankruptcy costs, and corporate taxation affect the firm’s financing and investment decisions. |
| Relation: | Journal of Financial and Quantitative Analysis |
| Appears in Collections: | [國家發展研究所] 期刊論文
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