scholarly journals Real Option, Investment Decision and Firm Risk Uncertainty: Empirical Research Based On Chinese Listed Corporation

2019 ◽  
Author(s):  
Hao-Wen FANG
Keyword(s):  
Empirical Research ◽  
Real Option ◽  
Investment Decision ◽  
Firm Risk ◽  
Listed Corporation ◽  
Risk Uncertainty

Research on the Real Options in Investment Decision of Waterway Infrastructure Construction

2013 ◽  
Vol 734-737 ◽  
pp. 1617-1620
Author(s):  
Wei Jin
Keyword(s):  
Real Options ◽  
Carbon Dioxide Emissions ◽  
Capital Investment ◽  
Real Option ◽  
Investment Decision ◽  
Energy Utilization ◽  
Real Options Theory ◽  
The Real ◽  
The Government ◽  
Real Option Method

Developing the waterway infrastructure construction can improve the efficiency of energy utilization, reduce the energy consumption intensity and carbon dioxide emissions. Till the year 2020, China plan to complete 19,000 kilometers high grade channel. Construction of water infrastructure construction requires a large capital investment. However, the main financial source of funding the construction of transportation infrastructure at present in China is special financial allocation of the government. The unitary financing structure as well as the funding pressure has leaded to some serious financing problems. This paper applied the real options theory to the waterway infrastructure construction financing, analyzed the limitations of the NPV method and the advantages of real option method in investment decision of waterway infrastructure construction, and took an example to show its feasibility.

scholarly journals Divest, Disregard, or Double Down? Philanthropic Endowment Investments in Objectionable Firms

2019 ◽  
Vol 1 (2) ◽  
pp. 241-256 ◽  
Author(s):  
Brigitte Roth Tran
Keyword(s):  
Investment Decision ◽  
Investment Decisions ◽  
Socially Responsible Investing ◽  
Firm Risk ◽  
Socially Responsible ◽  
Responsible Investing ◽  
Trade Offs ◽  
Profit Maximizing

How much, if at all, should an endowment invest in a firm whose activities run counter to the charitable missions the endowment funds? I offer the first model characterizing this type of investment decision. I introduce a strategy called “mission hedging,” where—in contrast to traditional socially responsible investing—foundations may benefit from skewing investment toward the objectionable firm in order to align funding availability with need. I characterize the trade-offs driving foundation investment decisions. By leveraging the idiosyncratic firm risk typically diversified away in profit-maximizing portfolios, foundations may find that bad actors provide good opportunities to hedge mission-specific risks. (JEL G11, G14, L31, M14)

Behavioural biases in investment decision making – a systematic literature review

2015 ◽  
Vol 7 (1) ◽  
pp. 88-108 ◽  
Author(s):  
Satish Kumar ◽  
Nisha Goyal
Keyword(s):  
Decision Making ◽  
Literature Review ◽  
Empirical Research ◽  
Systematic Literature Review ◽  
Investment Decision ◽  
Future Research ◽  
Behavioural Finance ◽  
Content Type ◽  
Investment Decision Making ◽  
The Impact

Purpose – The purpose of this paper is to systematically review the literature published in past 33 years on behavioural biases in investment decision-making. The paper highlights the major gaps in the existing studies on behavioural biases. It also aims to raise specific questions for future research. Design/methodology/approach – We employ systematic literature review (SLR) method in the present study. The prominence of research is assessed by studying the year of publication, journal of publication, country of study, types of statistical method, citation analysis and content analysis on the literature on behavioural biases. The present study is based on 117 selected articles published in peer- review journals between 1980 and 2013. Findings – Much of the existing literature on behavioural biases indicates the limited research in emerging economies in this area, the dominance of secondary data-based empirical research, the lack of empirical research on individuals who exhibit herd behaviour, the focus on equity in home bias, and indecisive empirical findings on herding bias. Research limitations/implications – This study focuses on individuals’ behavioural biases in investment decision-making. Our aim is to analyse the impact of cognitive biases on trading behaviour, volatility, market returns and portfolio selection. Originality/value – The paper covers a considerable period of time (1980-2013). To the best of authors’ knowledge, this study is the first using systematic literature review method in the area of behavioural finance and also the first to examine a combination of four different biases involved in investment decision-making. This paper will be useful to researchers, academicians and those working in the area of behavioural finance in understanding the impact of behavioural biases on investment decision-making.

The Role of Trust in the Informal Investor's Investment Decision: An Exploratory Analysis

1997 ◽  
Vol 21 (4) ◽  
pp. 63-81 ◽  
Author(s):  
Richard T. Harrison ◽  
Mark R. Dibben ◽  
Colin M. Mason
Keyword(s):  
Venture Capital ◽  
Empirical Research ◽  
Capital Market ◽  
Investment Decision ◽  
Theoretical Models ◽  
Policy Implications ◽  
Investment Opportunity ◽  
Informal Investment ◽  
Informal Venture Capital

Research into the informal venture capital market is characterized by a focus on empirical research into the characteristics of the market and on the development and analysis of the public policy Implications of this empirical research. There has, however, been little systematic application or development of theoretical models and frameworks appropriate to the informal venture capital market. Nor, with a few recent exceptions, has the empirical analysis of the market moved on to examine issues surrounding the process of Informal investment rather than the outcomes of that process. In this paper we seek to rectify both of these deficiencies. First, we develop a framework for the elucidation of the concepts of swift trust and swift cooperation, and in so doing formalize and expand on the generally passing references to trust in the entrepreneurship and venture capital literatures. Second, we derive from this an operationable framework for analyzing trust and cooperation, which we apply to the informal Investment decision-making process. Using verbal protocol analysis of Investor reactions In real time to one particular investment opportunity, we empirically examine the role of trust and cooperation in the investors’ Initial screening of potential investment opportunities, and the investors’ assessment of the intermediary responsible for providing the initial referral of the Investment opportunity.

The impact of delaying an investment decision on R&D projects in real option game

2016 ◽  
Vol 87 ◽  
pp. 182-189 ◽  
Author(s):  
Shuhua Chang ◽  
Yue Li ◽  
Fanglu Gao
Keyword(s):  
Real Option ◽  
Investment Decision ◽  
The Impact

scholarly journals Um Modelo de Opções Reais com Investimento Incerto e Seqüencial e com Tempo para Construir

2005 ◽  
Vol 3 (2) ◽  
pp. 141 ◽  
Author(s):  
Guilherme B. Martins ◽  
Marcos Eugênio Da Silva
Keyword(s):  
Differential Equation ◽  
Real Option ◽  
Investment Decision ◽  
Maximization Problem ◽  
Investment Opportunity ◽  
Rule Based ◽  
Construction Period ◽  
Time To Build ◽  
Option Model ◽  
A Company

This article develops a real option model with uncertain and sequential investment and with time to build. The model includes options to entry and to exit the activity and addresses the maximization problem of a company in view of the investment opportunity. The differential equation of the asset is obtained by using dynamic programming and risk neutral evaluation. Particularly, for the construction period, the differential equation is partial and elliptical, which demands the use of numeric methods. The main results of the article are that (i) with uncertain and sequential investment and with time to build, the waiting value, which creates a gap between the investment decision rule based on NPV and that based on a real option model, may not very significant and (ii) the increase in uncertainty may anticipate the decision to investment.

Macroeconomic Uncertainty and Quantitative vs. Qualitative Inputs to Analyst Risk Forecasts

2020 ◽  
Author(s):  
Khrystyna Bochkay ◽  
Peter Joos
Keyword(s):  
Investment Decision ◽  
Quantitative Information ◽  
Investment Risk ◽  
Firm Risk ◽  
Qualitative Information ◽  
Macroeconomic Conditions ◽  
Macroeconomic Uncertainty ◽  
Investment Decision Making ◽  
Risk Forecasting ◽  
Disclosure Tone

Risk forecasting is crucial for informed investment decision-making. Moreover, the salience of investment risk increases during economically uncertain times. In this paper, we study how sell-side analysts form expectations of firm risk, under different macroeconomic conditions (low versus high uncertainty) and by distinguishing between quantitative and qualitative information inputs. We find that analysts jointly consider quantitative and qualitative information but that their reliance on qualitative information - in particular, disclosure tone - increases when macroeconomic uncertainty is high. We also find that analysts mostly rely on disclosure tone when it contradicts quantitative information. These findings highlight how narrative disclosures can provide context for quantitative information. Finally, we find that analysts' specific use of quantitative/qualitative information improves their forecasts as predictors of firm risk. Together, our results illuminate analysts' risk forecasting process - what information they use and how.

scholarly journals Investment and exchange rate uncertainty under different regimes

2014 ◽  
Vol 44 (3) ◽  
pp. 553-577
Author(s):  
Cristiano Aguiar de Oliveira
Keyword(s):  
Exchange Rate ◽  
Real Option ◽  
Investment Decision ◽  
Exchange Rate Regimes ◽  
Significant Loss ◽  
Project Investment ◽  
Foreign Markets ◽  
Exchange Rate Uncertainty ◽  
Regime Stability ◽  
The Impact

This paper examines the impact of the exchange rate uncertainty on investment under different exchange rate regimes. The paper presents a theoretical model where exchange rate is a stochastic process and investment decision behaves as a Real Option. The paper evaluates the performance of a new project investment under free float, fixed and intermediate exchange rate regimes (managed float and crawling peg). The comparison among the different regimes shows that the crawling peg has advantages when compared to other regimes. The regime stability implies that less currency devaluations are necessary to stimulate investment, especially when there is a significant loss of market power in foreign markets.

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