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

Evaluation of strategic IT investments using traditional capital budgeting methods has proven problematic. This especially entails IT platform investments where the immediate short term benefits are not sufficient to justify the investment. At the same time the investment may entail substantial, although highly uncertain strategic future benefits for the firm, subject to different types of risk...

This paper presents an empirical study to explore how firms invest in their IT infrastructure to support strategic flexibility. It investigates how IT infrastructure capabilities relate to strategic flexibility, how firms build flexibility into their IT investment decisions, and how the firms use IT to support strategic flexibility. Our cases indicate that different types of needed flexibility ...

In liberalized electricity markets strategic firms compete in an environment characterized by fluctuating demand and non-storability of electricity. While spot market design under those conditions by now is well understood1, a rigorous analysis of investment incentives is still missing. Existing models, as the peak-load-pricing approach, analyze welfare optimal investment and find that optimal ...

in order to have a succesful investment companies, their activities in this very complicated bussines enviroment, require to indentify the facing threats and have definitely deep knowledge of all difficulties beforehand. in this regards looking at strategic risks (potetial forces which can destabilize the system of strategy and have a considerable negative effect on the investigating campany’s ...

This study examines the impacts of real exchange rate fluctuations on the companies' strategic investments in Iran. The data of 92 listed companies in Tehran Stock Exchange during the period of 2002-2015areused. First, the volatility of exchange rate is estimated by the Generalized Autoregressive Conditional Heteroskedasticity (GARCH). The model is estimated by GMM and system GMM methods. The r...

This paper uses a real options perspective to augment the standard R&D investment model and implements a firm-level empirical analysis to assess the practical significance of market uncertainty and its interactions with strategic rivalry and firm size. We use a measure of firm-relevant market uncertainty along with panel data and find that firms invest less in current R&D as uncertainty about m...

This paper analyzes the investment timing for team projects. Under demand uncertainty, it is valuable to maintain flexibility in future investment alternatives. However, one party’s flexibility creates strategic uncertainty for another party, which causes the other party to choose a higher level of flexibility. This strategic complementarity leads to delays in investments in contrast to the cas...

Non-strategic firms with rational expectations make investment and emissions decisions. The investment rule depends on firms’ beliefs about future emissions policies. We compare emissions taxes and quotas when the (strategic) regulator and (nonstrategic) firms have asymmetric information about abatement costs, and all agents use Markov Perfect decision rules. Emissions taxes create a secondary ...