The dynamics of investment projects: Evidence from Peru

Rocio Gondo Mori and Marco Vega

Journal of International Money and Finance, 2019, vol. 96, issue C, 324-340

Abstract: We analyse the effect of commodity price cycles on firm investment decisions at the project level, by considering the decision to delay, cancel or complete a project as initially announced. In particular, we use logit and duration models of competing risks on a novel dataset of announced investment projects in Peru from different economic sectors. The empirical framework for the timing of investment is motivated by real option models for projects that take time to build, with commodity prices used as a proxy of expected future income and their volatility as a proxy for uncertainty.

Keywords: Investment projects; Panel logit; Competing risks (search for similar items in EconPapers)
JEL-codes: E43 E51 E52 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: The dynamics of investment projects: evidence from Peru (2017)
Working Paper: The Dynamics of Investment Projects: Evidence from Peru (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:96:y:2019:i:c:p:324-340

DOI: 10.1016/j.jimonfin.2017.07.007

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