Read Policy Reform, Adjustment Costs, and Investment- With Activity of Local Investors as a Signal

Policy Reform, Adjustment Costs, and Investment- With Activity of Local Investors as a Signal

Omotunde E.G. Johnson

4.9/5 (30491 ratings)

Description:Even with rapid and resolute policy reform, including capital account liberalization, private capital accumulation and reallocation by investors can be slower than is pareto-optimal. For national investors as well as foreign investors in their capacity as reinvestors of profits earned locally and reallocators of capital already in the country-both to be identified simply as local investors-the underlying problem may be sizable adjustment costs, in expanding capital (see, e.g., Lucas, 1967) or in reallocating (capital) from the old sectors (from which exit is now optimal) to those where expansion of capital is now more profitable under the new regime (see, e.g., Dixit, 1989). Or investors could be frustrated by capital market imperfections particularly since the investors may not have established a track record of profitable operation in the expanding sectors.1 Investors, for instance, could face exceptional financing costs (e.g., higher borrowing interest rate or very strict credit rationing than normal) because a firm has not had a long history of successful operation in a new environment or business. Then there is what has been called structural uncertainty (Zeira, 1987) that arises when a firm is uncertain about its profit function and must discover it through a process of search via experience gained from engaging in the investment activity, supplemented perhaps by some market research. Structural uncertainty could be especially severe during periods of structural reforms requiring major sectoral reallocation of capital.We have made it easy for you to find a PDF Ebooks without any digging. And by having access to our ebooks online or by storing it on your computer, you have convenient answers with Policy Reform, Adjustment Costs, and Investment- With Activity of Local Investors as a Signal. To get started finding Policy Reform, Adjustment Costs, and Investment- With Activity of Local Investors as a Signal, you are right to find our website which has a comprehensive collection of manuals listed.
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Pages: 44

Format: PDF, EPUB & Kindle Edition

Publisher: Not Avail

Release: 1997

ISBN: 6613802999

Description: Even with rapid and resolute policy reform, including capital account liberalization, private capital accumulation and reallocation by investors can be slower than is pareto-optimal. For national investors as well as foreign investors in their capacity as reinvestors of profits earned locally and reallocators of capital already in the country-both to be identified simply as local investors-the underlying problem may be sizable adjustment costs, in expanding capital (see, e.g., Lucas, 1967) or in reallocating (capital) from the old sectors (from which exit is now optimal) to those where expansion of capital is now more profitable under the new regime (see, e.g., Dixit, 1989). Or investors could be frustrated by capital market imperfections particularly since the investors may not have established a track record of profitable operation in the expanding sectors.1 Investors, for instance, could face exceptional financing costs (e.g., higher borrowing interest rate or very strict credit rationing than normal) because a firm has not had a long history of successful operation in a new environment or business. Then there is what has been called structural uncertainty (Zeira, 1987) that arises when a firm is uncertain about its profit function and must discover it through a process of search via experience gained from engaging in the investment activity, supplemented perhaps by some market research. Structural uncertainty could be especially severe during periods of structural reforms requiring major sectoral reallocation of capital.We have made it easy for you to find a PDF Ebooks without any digging. And by having access to our ebooks online or by storing it on your computer, you have convenient answers with Policy Reform, Adjustment Costs, and Investment- With Activity of Local Investors as a Signal. To get started finding Policy Reform, Adjustment Costs, and Investment- With Activity of Local Investors as a Signal, you are right to find our website which has a comprehensive collection of manuals listed.
Our library is the biggest of these that have literally hundreds of thousands of different products represented.

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Policy Reform, Adjustment Costs, and Investment- With Activity of Local Investors as a Signal

Policy Reform, Adjustment Costs, and Investment- With Activity of Local Investors as a Signal

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