Recovery from societal and market catastrophe is a daunting process that requires multifunctional, systemic, and long-term efforts. Humanitarian aid and donor assistance are rarely sufficient. Trade and other forms of direct investment in devastated markets offer another kind of recovery assistance. However, risks encountered in recovering economies can deter firms from investing. The authors apply a real-options framework to examine the financial feasibility of trading with recovering economies; they apply the framework to the countries of the war-disintegrated former Yugoslavia. The real-options framework considers the value of managerial flexibility in the presence of risks. The authors discuss implications for policy, marketing management, export development, and economic and societal recovery in several contexts.
ASJC Scopus subject areas
- Business and International Management
- Economics and Econometrics