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Article: Investigators at Southern Methodist University zero in on financial and quantitative analysis.
- Article from:
- Investment Weekly News
- Article date:
- July 28, 2008
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"This paper examines how industry structure affects corporate investment patterns. Real options theory shows that deferring irreversible investment in the face of uncertainty is valuable," researchers in the United States report.
"Theory also shows that the value of waiting to invest falls if investment opportunities are contestable. Consistent with these theories, we find that firms in monopolistic industries exhibit lower investment-q sensitivity and are slower to invest than firms in competitive industries. However, we find that investment-q sensitivity and investment speed are highest in oligopolistic industries, suggesting that the value of investing ...