| Registro completo |
| Provedor de dados: |
AgEcon
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| País: |
United States
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| Título: |
Estimation of a Backward-Bending Investment Demand Function for Agribusiness Firms
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| Autores: |
Kropp, Jaclyn D.
Power, Gabriel J.
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| Data: |
2010-05-02
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| Ano: |
2010
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| Palavras-chave: |
Investment demand
Irreversible investment
Real options
Agribusiness
Agricultural Finance
Financial Economics
D81
D92
Q13
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| Resumo: |
We investigate irreversible investment behavior under uncertainty of payoffs using U.S. firm-level panel data. We estimate the relationship between the firm’s investment to capital ratio and the interest rate, while controlling for investment opportunities, real option values, uncertainty and profitability. The results indicate the investment demand curve is a backward-bending function of the interest rate; at low interest rates, an increase in the interest rate leads to increased investment by increasing the cost of postponing investment. Firm investment behavior is also consistent with real options behavior. The investment behavior of agribusiness firms is significantly different from firms in other sectors.
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| Tipo: |
Conference Paper or Presentation
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| Idioma: |
Inglês
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| Identificador: |
http://purl.umn.edu/61293
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| Relação: |
Agricultural and Applied Economics Association>2010 Annual Meeting, July 25-27, 2010, Denver, Colorado
Selected Paper
11630
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| Formato: |
23
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