haku: @journal_id 1277 / yhteensä: 97
viite: 4 / 97
| Tekijä: | Domingo Castelo Joaquin, D. C. Khanna, N. |
| Otsikko: | Investment timing decisions under threat of potential competition: Why firm size matters |
| Lehti: | Quarterly Review of Economics and Finance
2001 : SPRING, VOL. 41:1, p. 1-18 |
| Asiasana: | ECONOMICS COMPETITION INVESTMENT COMPANIES |
| Kieli: | eng |
| Tiivistelmä: | The authors study the value of the option to wait when other firms are looking at similar opportunities and may enter while one firm is waiting for uncertainty resolution. There are two important results. First the value of an investment project is affected by a firm's assets-in-place, giving some firms a comparative advantage in competitive situations. Second, when two firms with different sized assets-in-place are looking at similar investment decisions, in the unique sub-game perfect equilibrium, the smaller firm invests earlier and also exits before a competing firm with larger assets-in-place. This makes an otherwise identical investment more valuable for the smaller firm. The larger firm optimally foregoes first-mover advantage because of higher expected exit costs. |
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