Options, Timing, and Regional Entry of Firms

Elisabet Berglund ()
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Elisabet Berglund: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden

No 505, Umeå Economic Studies from Umeå University, Department of Economics

Abstract: This paper studies how the possibility to postpone the unrecoverable entry and location cost affects regional entry when post-entry earnings are uncertain. We find that the opportunity cost to enter today is higher when entering a region with high uncertainty relative to a region with low uncertainty.

Keywords: Timing; Regional uncertainty; Brownian motion (search for similar items in EconPapers)
JEL-codes: C61 D21 D84 R12 (search for similar items in EconPapers)
Pages: 13 pages
Date: 1999-04-21
New Economics Papers: this item is included in nep-ind and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:umnees:0505

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