- January 2015
International Standard Serial Number (ISSN)
- This paper analyses the social value of a firm considering different objective functions in a real options perspective. Our results show that the socially optimal investment policy is not Pareto optimal, but significant gains in the value (generated by a firm) can be obtained by departing from a strict shareholder maximizing objective. Taking into account the role of supporting businesses, this paper develops a simple cost benefit framework that serves as a tool for assessing public investment incentive policies.
- real options; public investment incentives; capital structure; structural models; credit risk; incentives; innovations; investment; management; costs