Financing investment under fundamental uncertainty and instability: A heterodox microeconomic view

The business enterprise in the real world wrestles with fundamental uncertainty and instability. Key enterprise decisions such as pricing, financing, and investment are thus made strategically rather than optimally. Heterodox economists are, however, divided in the account of business enterprise's financing behavior; macroeconomists put an emphasis on external financing, whereas microeconomists on internal financing. Moreover, they often stop short of establishing a link between the two. Drawing upon the social provisioning perspective, this essay aims at providing a new light on financing focusing on strategic enterprise decision-making mechanisms.