Preemption, Start-Up Decisions and the Firms' Capital Structure

19 Pages Posted: 14 Jun 2007

See all articles by Michele Moretto

Michele Moretto

University of Padua, Dep of Economics and Management

Paolo M. Panteghini

Department of Economics and Management; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: May 2007

Abstract

In this article, we analyse the interactions between financial and start-up decisions in an oligopolistic framework, where firms compete to enter a new market. We show that preemption can substantially reduce the negative effects of credit rationing on start-up investment decisions.

Keywords: capital structure, irreversibility, preemption, real options

JEL Classification: D92, G33

Suggested Citation

Moretto, Michele and Panteghini, Paolo M., Preemption, Start-Up Decisions and the Firms' Capital Structure (May 2007). CESifo Working Paper Series No. 2006, Available at SSRN: https://ssrn.com/abstract=993371

Michele Moretto

University of Padua, Dep of Economics and Management ( email )

via Del Santo 33
Padova, 35123
Italy
+39 049 8274265 (Phone)
+39 049 8274211 (Fax)

Paolo M. Panteghini (Contact Author)

Department of Economics and Management ( email )

Contrada Santa Chiara 50
BRESCIA, BS 25122
Italy

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.cesifo.de

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