This paper presents an analytically tractable continuous-time general equilibrium model with investment irreversibility and fixed adjustment costs. In the model, there is a continuum of firms that are subject to idiosyncratic shocks to capital. Although the presence of investment frictions lowers consumer welfare, it may raise or reduce the long-run average capital stock, depending on the degre...

This paper provides a different perspective on the firm-level empirical analysis of the relation between foreign ownership and capital demand adjustment in host countries. The author estimates a dynamic structural model of investment on a sample of 4672 Belgian firms observed between 2003 and 2010 that permits to distinguish the ‘ownership status’ of firms. He considers a dynamic discrete choic...

This paper analyzes the joint impact of the interest rate volatility and debt on firm investment. We derive an investment model taking account of the risk attitude of the owners of the firm. Using a panel of Dutch listed firms in the period of 1984–1995, we find that the cross-effect of the interest rate volatility and debt on investment is positive. This effect is more important for highly ind...

This paper examines optimal consumption and investment choices and the cost of hedging contingent claims in the presence of margin requirements or, more generally, of non-linear wealth dynamics and constraints on the portfolio policies. Existence of optimal policies is established using martingale and duality techniques under general assumptions on the securities’ price process and the investor...

This paper studies an incompletely informed regulator's problem of inducing a firm producing durable pollution to adopt a socially optimal pollution storage technology. We construct a sparse, yet flexible, theoretical model that can be applied directly to concrete situations as it is stated explicitly in terms of statistical parameters. Next, we show the existence of an optimal regulatory contr...

D-serine plays an essential role in the field of medicine and cosmetics. Diaminopimelate dehydrogenase (DAPDH) is a kind oxidoreductase that can reduce keto acid into corresponding D-amino acid. Because its high stereoselectivity lack by-product production, DAPDH has become preferred enzyme for efficient one-step synthesis acids. However, types with reductive amination function reported so far ...