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

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.

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Publication date:
2002-01-01
UUID:
uuid:8b90b0ed-7346-46e4-9998-9c69556ad442
Local pid:
oai:eureka.sbs.ox.ac.uk:916
Deposit date:
2011-10-19

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