Working Paper
Preemption, Start-Up Decisions and the Firms’ Capital Structure
Michele Moretto, Paolo Panteghini
CESifo, Munich, 2007
CESifo Working Paper No. 2006
CESifo, Munich, 2007
CESifo Working Paper No. 2006
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.
CESifo Category
Industrial Organisation
Industrial Organisation
Keywords: capital structure, irreversibility, preemption, real options
JEL Classification: D920,G330