We investigate the strategic incentives for vertical foreign direct investment by oligopolistic firms under exchange rate uncertainty. Domestic final good firms meet their input requirements either by investing abroad and producing directly through a subsidiary (intra-firm trade) or by buying from an oligopolistic market abroad (inter-firm trade). Firms undertaking vertical investment can bid u...

Contrary to most of the papers in the literature of investment under uncertainty we study models that not only capture the timing, but also the size of the investment. We consider a monopoly setting as well as a duopoly setting and compare the results with the standard models in which the firms do not have the capacity choice. Our main results are the following. First, for low uncertainty value...

Why are some uncompetitive industry sectors so effective in lobbying for greater protection and support? This paper attempts to explain the lobbying success of these industries in terms of the strategic role of investment in technology as a credible commitment device. By eschewing potentially profitable investment opportunities firms credibly signal to the government that the cost of a tariff r...

Abstract In this article we analyze firms investment incentives in liberalized electricity markets. Since electricity is economically non storable, it is optimal for firms to invest in a differentiated portfolio of technologies in order to serve strongly fluctuating demand. Prior to the Liberalization of electricity markets, for regulated monopolists, optimal investment and pricing strategies h...

this study is intended to investigate the level of public-private cooperation in the process of agricultural development from the view point of potential investors and producers. to achieve this objective we used an adjusted jensen model as a conceptual framework for cooperation. in this process mutual responsibilities is provided to reveal different dimensions of strategic cooperation between ...

Large amounts of resources have been and continue to be invested in information technology (IT). Much of this investment is made on the basis of-faith that returns will occur. This study presents the results of an empirical test of the performance effects of IT investment in the manufacturing sector. Six years of historical data on IT investment and performance was collected for 33 valve manufa...

The strategic effects of subsidies on output and subsidies on investment differ substantiaily in dynamic models where a government's commitment ability is limited. Output subsidies remain effective even as the period of commitment vanishes, but investment subsidies may become completely ineffective. This difference has been obscured because most existing models of strategic trade policy are sta...