Lack of transmission capacity hampers the integration of the European electricity market, and thereby precludes reaping the full benefits of competition. We investigate the extent to which transmission grid expansion promotes competition, efficiency and welfare. This work proposes a three-stage model for grid investment: a benevolent planner decides on network upgrades, considering welfare bene...

In this paper we apply a simple two-period model of investment to examine how consideration of the real options associated with investment decisions might be expected to affect the cost of capital for telecommunications infrastructure firms in light of the tumultuous changes associated with the emergence of the Internet. Because investments in new telecommunications facilities also may provide ...

Real options reasoning (ROR) is a conceptual approach to strategic investment that takes into account the value of preserving the right to make future choices under uncertain conditions. In this study, we explore firms’ motivations to invest in a new option. We find, based on an analysis of a large sample of patents by firms active in the pharmaceutical industry, that their investments in R&D a...

Many studies work focusing on the interaction between the various dimensions of supply chain (SC) relationships (such as trust, commitment, satisfaction, investment, communication and collaboration) but far less on the impact of SC relationships on switching cost and strategic flexibility. The partnership interaction between the SC and the strategic flexibility is the most important factor when...

We develop a model based on the theory of incomplete contracts for how ownership structure of interorganizational systems (IOS) can affect information exploitation and IT adoption. Our model yields several propositions that suggest the appropriate strategic actions that a firm may take when there is potential for IOS adopters to question whether adopting the IOS will be value maximizing. We ana...

When individual petroleum-producing firms make their exploration and development investment timing decisions, positive information externalities and negative extraction externalities may lead them to interact strategically with their neighbors. If they do occur, strategic interactions in petroleum production would lead to a loss in both firm profit and government royalty revenue. The possibilit...

In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT investments jointly influence profitability and the market value of the firm. We view IT strategy as an expression of the dominant strategic objective that the firm chooses to emphasize, which can be revenue expansion, cost reduction, or a dualemphasis in which both goals are pursued. Using d...

New management techniques such as ‘just-in-time’, ‘lean manufacturing’ and ‘Six Sigma’ allow management accountants to shift their focus from the management and control of production processes to the management of strategic issues. This paradigm shift resulted from shorter product life cycles, due to technological advances and a more competitive business environment. Recent revisions to the Int...

Abstract—Strategic investment decisions are characterized by high innovation potential and long-term effects on the competitiveness of enterprises. Due to the uncertainty and risks involved in this complex decision making process, the need arises for well-structured support activities. A method that considers cost and the long-term added value is the cost-benefit effectiveness estimation. One o...

When individual petroleum-producing firms make their exploration and development investment timing decisions, positive information externalities and negative extraction externalities may lead them to interact strategically with their neighbors. If they do occur, strategic interactions in petroleum production would lead to a loss in both firm profit and government royalty revenue. The possibilit...