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Hysteresis of plant closures and reopenings in the UK Brick Industry: real options and/or strategy

Wood, A and Driver, C (2005) Hysteresis of plant closures and reopenings in the UK Brick Industry: real options and/or strategy. UNSPECIFIED. Working Paper Series, Colchester.

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Abstract

In this paper we analyse industry dynamics in the UK bricks industry. This is an industry characterised by conditions that predict real options type behaviour in entry and exit. In addition, strategic interactions are likely. The market structure is oligopolistic and the existence of spatial competition due to high transport costs may favour pre-emption. We find evidence that uncertainty delays the decision to open and close plants, though this effect appears to be non-linear for the decision to open. We find (limited) evidence for pre-emption. There is also support for other predictions of strategic behaviour such as differential probability of entry and exit depending on market share and history of acquisition activity.

Item Type: Monograph (UNSPECIFIED)
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Faculty of Social Sciences > Essex Business School > Essex Finance Centre
Depositing User: Susan Hearsum
Date Deposited: 24 Oct 2014 11:05
Last Modified: 02 Jan 2018 23:16
URI: http://repository.essex.ac.uk/id/eprint/10287

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