Ciaran Driver and Katsushi Imai (2003) Testing Real Options Theory Using Data on Capital Adequacy.
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This paper uses unique survey-based data that record the extent of positive and negative disequibrium in capital stock at industry level. We observe movement in this disequilibrium and model it to take account of long-run plans, short-term revisions to expectations, and the influence of uncertainty on adjustment. We find that increased uncertainty slows the adjustment of fixed capital towards equilibrium levels, in line with the predictions of real options theory and partial irreversibility models.
This is a Accepted version This version's date is: 2003 This item is peer reviewed
https://repository.royalholloway.ac.uk/items/ac47ab69-97a4-d3f1-3d68-021c43ca0f76/1/
Deposited by Leanne Workman (UXYL007) on 24-Oct-2012 in Royal Holloway Research Online.Last modified on 24-Oct-2012
©2003 Ciaran Driver and Katsushi Imai. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit including © notice, is given to the source.