investment models must be attributable to movements in equity risk premia. In this Paper we emphasise that such movements in … equity risk premia should have implications not merely for investment today, but also for future investment over long …-horizon fluctuations in the growth of marginal Q, and therefore investment. We test this implication directly by performing long …

Conventional wisdom has it that increasing price or exchange rate uncertainty will depress investment. Using the Dixit … uncertainty leads to more investment. It depends first on the risk of being stuck with (ex-post) unwanted investments, then on the … increase or decrease investment; and also to identify which types of industries would gain, and which would suffer, from a move …

investment goods in developing countries. One implication of our findings is that increased aid flows to developing countries …

, falling labor share and accumulation of a large foreign surplus. The theory makes only minimal deviations from a neoclassical … assets, generating a foreign surplus. We test some auxiliary implications of the theory and find robust empirical support. …

. Consistent with the predictions of the theory, there is considerable heterogeneity in the effect of uncertainty on investment: it …Theoretical models of investment under uncertainty predict that the sign and the strength of the investment … investment and the market power of the firm. This paper investigates the effects of uncertainty on the investment decisions of a …

140% of exports. Second, we depart from reduced form growth regressions and perform direct tests of the theory on the thus …: (i) investment falls precipitously as it should when it becomes optimal to default; (ii) economic policy deteriorates … interest rates. We find a systematic response of investment, particularly when property rights are weakly enforced, some …

This paper examines the link between liquidity constraints and investment behaviour on the one hand, and firm size on … have investment functions which are more sensitive to liquidity constraints than do the larger enterprises. These results …

Underdevelopment is thought to be about lack of investment, and many political economy theories can account for this …. Yet, there has been much investment in developing countries. The problem has been that investment growth has not led to … output growth. We therefore need to explain not simply underinvestment, but also the misallocation of investment. The …

these predictions using plant-level data for the UK manufacturing sector. Most importantly, and consistent with theory, we … the likelihood of vertical integration. Also consistent with theory, both these effects are stronger when the supplying …