When Are Real Options Exercised? An Empirical Study of Mine Closings

Moel, Alberto and Tufano, Peter (2002) When Are Real Options Exercised? An Empirical Study of Mine Closings. The Review of Financial Studies, 15 (1). pp. 35-64.

Abstract

In this article, we study a well-known real option: the opening and closing of mines. Using a new database that tracks the annual opening and closing decisions of 285 developed North American gold mines in the period 1988-1997, we find that the real options model is a useful descriptor of mines' opening and shutting decisions. In addition, we find that the decision whether to shut a mine is related to firm-specific managerial factors not normally considered within a strict real options model.

Item Type: Article
Keywords: mining; real options; decision making
Date Deposited: 19 Oct 2011 14:02
Last Modified: 14 Aug 2015 13:04
URI: http://eureka.sbs.ox.ac.uk/id/eprint/916

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