Encyclopedia of Law and Economics

2019 Edition
| Editors: Alain Marciano, Giovanni Battista Ramello

Fixed Investment

  • Rafael Llorca-ViveroEmail author
Reference work entry
DOI: https://doi.org/10.1007/978-1-4614-7753-2_177

Abstract

In a wide sense, the concept of “fixed investment” refers not only to investment in physical capital but also to expenses directed to other intangible assets such as high qualified labor, R&D, the acquisition of particular knowledge about markets or consumers’ behavior, advertising, etc. Fixed investment is directly connected with the fixed cost of production of a firm, which is independent of the evolution of output by definition. The consequent emergence of economies of scale and the consideration of irreversible fixed costs (sunk costs) as a strategic variable for market competition (barriers to entry) have led to the development of new theories in the fields of Law and Economics, International Trade or Industrial Organization.

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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.University of ValenciaValenciaSpain