RT Generic
T1 Expropriation risk, investment decisions and economic sectors
A1 Restrepo Ochoa, Diana Constanza
A1 Vaz Antunes Pereira Correia, José Ricardo
A1 Peña, Juan Ignacio
A1 Población, Javier
A2 Universidad Carlos III de Madrid. Departamento de Economía de la Empresa, 
AB We build a Real Options model to assess the importance of private provisionand the impact of expropriation risk on investment timing, investmentvolumes, governmental costs and social welfare. We consider two types ofbusinesses (essential and non essential businesses) and two stages (operatingand investment opportunities), and answer questions regarding three maintopics: the firm's reaction to expropriation risk, the government drivers toexpropriate, and the costs this generates in terms of welfare. We find thatthe firm makes suboptimal investment decisions. When we endogenize thereputational costs of expropriation, results show that the decision of the governmentregarding the level of political risk will largely depend on the typeof business. However, in terms of welfare it is never optimal to expropriate
SN 2341-0795
YR 2014
FD 2014-09
LK https://hdl.handle.net/10016/19279
UL https://hdl.handle.net/10016/19279
LA eng
DS e-Archivo
RD 20 may. 2024