Stochastic Capacity Investment and Flexible vs. Dedicated Technology Choice in Imperfect Capital Markets

Stochastic Capacity Investment and Flexible vs. Dedicated Technology Choice in Imperfect Capital Markets

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The Impact of Budget Constraints on Flexible vs. Dedicated Technology Choice

This paper studies the flexible-versus-dedicated technology choice and capacity investment decisions of a multi-product firm under demand uncertainty in the presence of budget constraints. The firm operates under a capital budget for financing the capacity investment, and an operating budget, which is uncertain in the capacity investment stage, for financing the production. We investigate how t...

Imperfect Financial Markets and Investment Dynamics

This paper studies optimal dynamic investment and ...nancial policy of the ...rm, if the interest rate on the ...rm’s debt depends on its capital structure. We characterize the optimal investment and ...nancing decisions and show how the incentive to invest and the market value of the ...rm are a¤ected by ...nancial considerations. Conditions are derived under which average Q remains a su¢cient...

Imperfect Capital Markets and Nominal Wage Rigidities

Working papers of the Federal Reserve Bank of Cleveland are preliminary materials circulated to stimulate discussion and critical comment on research in progress. They may not have been subject to the formal editorial review accorded official Federal Reserve Bank of Cleveland publications. The views stated herein are those of the authors and are not necessarily those of the Federal Reserve Bank...

Technology Choice and Capacity Investment Under Emissions Regulation