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Title:Irreversibility, endogenous mean reversion, and the investment decision of a foreign firm PDF Logo
Authors:Pierdzioch, Christian
Issue Date:1998
Series/Report no.:Kiel Working Papers 847
Abstract:The paper derives a valuation formula for the real option of a firm to undertake an irreversible investment in a foreign economy based on the endogenous dynamics of a stochastic macroeconomic framework with sluggish price adjustment. The option valuation formula is implemented to analyze the impact of macroeconomic dynamics on the attraction of an economy for foreign investors.
Document Type:Working Paper
Appears in Collections:Kieler Arbeitspapiere, IfW
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