Asymmetry and uncertainty in capital formation: an application to oil investment
Theories of irreversible investment suggest a negative relation between investment and uncertainty, and nonlinear adjustment costs open for asymmetries in the adjustment of fixed capital. We propose an econometric modelling approach to estimate and test the key predictions of modern investment theory, including asymmetric dynamics and various uncertainty indicators. Our application on a data set from the oil industry offers empirical support for both asymmetric dynamics and uncertainty in oil and gas investment.
Year of publication: |
2011
|
---|---|
Authors: | Mohn, Klaus ; Osmundsen, Petter |
Published in: |
Applied Economics. - Taylor & Francis Journals, ISSN 0003-6846. - Vol. 43.2011, 28, p. 4387-4401
|
Publisher: |
Taylor & Francis Journals |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Industry restructuring, OPEC response - and oil price formation
Aune, Finn Roar, (2007)
-
Valuation of international oil companies : RoACE era
Osmundsen, Petter, (2005)
-
Asymmetry and uncertainty in capital formation: an application to oil investment
Mohn, Klaus, (2008)
- More ...