The delaying effect of financing constraints on investment

We develop a simple model in which a firm considers a number of investment projects. Because of limited financial resources, the firm can undertake at most one project. In line with the literature on real options we stress features like irreversibility, uncertainty and the possibility to postpone the investment decision and argue that financing constraints tend to increase the value of waiting.

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Year of publication:	2003
Authors:	Wilko, Letterie ; de, Laar Mindel van
Institutions:	Graduate School of Business and Economics (GSBE), School of Business and Economics
Subject:	Economics

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Extent:	application/pdf
Series:	Research Memorandum.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series Research Memoranda Number 004
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011160356