This paper investigates the effect of uncertainty on R&D investment. We find that firms invest more in R&D when they … support the theory of strategic growth option in which firms under competition follow preemptive strategy when they face high …

constitutes a link between arbitrage choice theory and corporate investment theory, and shows that explicit discounting is not …This paper deals with capital budgeting decisions under uncertainty. We present an Aggregate Return On Investment (AROI … which, compared with the risk-adjusted cost of capital, correctly signals wealth creation. For choosing between two mutually …

This paper studies the behavior of two firms after a new investment opportunity arises. Examples of such an investment … types of separating equilibrium are possible when investment costs are private information. In the first type, the firm with … illustrate that when first-mover advantage is large, the firm that delays the investment should be almost certain about the rival …

: (i) asymmetric beliefs and risk attitudes, (ii) actions by both parties, and (iii) endogenous termination of the … relationship. We show how the inter-temporal tradeoff between the benefits of agent optimism and the costs of risk-sharing affects … significantly influences project values, and that permanent and transitory components of risk have opposing effects on project …

effects of regime uncertainty on a firm's strategic investment decision, taking into consideration the remaining time to the …

firm-level capital investment, risk management, and debt issuance. The effects of uncertainty vary significantly by firm … capital investment is significantly weaker for firms that hedge their output price risk. Our analysis highlights that, in the … investment or debt issuance. In contrast, small firms do not adjust their hedging intensity but significantly lower capital …

We analyze the impact of progressive taxation on irreversible investment under uncertainty. We show that if tax … exemption is lower than sunk cost, higher tax rate will decelerate optimal investment by increasing the optimal investment … investment threshold is a positive function of volatility, but independent of tax rate. For medium volatilities it is independent …

's disposition towards realizing an investment project under risk aversion. We show that capital gains taxation often reduces this …We analyze the impact of taxation on the option to defer an investment decision and derive tax rates that do not … a comparison of different tax rules and their impact on investment decisions without explicitly referring to the after …

We study the effects of uncertainty on corporate leverage adjustments with respect to investment spikes and find that … overlevered and underlevered firms behave very differently in response to the combination of uncertainty and investment spikes …

volatility generates investment and growth opportunities in poor countries. But high uncertainty and low overprecision slow …