We provide theoretical and empirical evidence that policy uncertainty can significantly affect firm level investment … and entry decisions in the context of international trade. When market entry costs are sunk, policy uncertainty can create … a real option value of waiting to enter foreign markets until conditions improve or uncertainty is resolved. Using a …

This Paper investigates the empirical relationship between uncertainty and investment dynamics. This is motivated by … can be detected as a smaller impact of sales growth on investment for firms facing higher uncertainty. Using a stock … the real options literature, which suggests a weaker response of investment to demand shocks at higher levels of …

between risk and uncertainty is implemented by applying the Gilboa-Schmeidler maxmin with multiple priors framework to lenders …, ultimate lenders and financial intermediaries. The model is used to investigate the impact of uncertainty about the likelihood … include: (i) An unanticipated increase in bailout uncertainty raises interest rates, the volume of defaults in both the real …

that, contrary to what they profess, macroeconomic and political risk is not inhibiting the investment behavior of …Firms in many developing countries cite macroeconomic instability and political uncertainty as major constraints to … their growth. Economic theory suggests uncertainty can cause firms to delay investments until uncertainty is resolved. We …

liquidity, especially for stocks with small market capitalization, high volatility and no listed options; (ii) slowed down price … discovery, especially in bear market phases, and (iii) failed to support stock prices, except possibly for U.S. financial stocks. …

asymmetry during the liquidity freeze and market run of October 1907 - one of the most severe financial crises of the 20th … century. We estimate that the run on the market increased spreads from 0.5% to 3% during the peak of the crisis and, using a …-based illiquidity: trading volume dropped and price impact rose. Importantly, despite short-term cash infusions into the market, we find …

Communication Networks, and three wholesale market makers for 20 actively traded stocks with varying liquidity at Nasdaq. Our … market makers dominate the less liquid stocks. …

maximal when access to price information is rationed. We show that a market for price information can implement the fraction … of insiders that maximizes investors’ average welfare. This market features a high price to curb excessive acquisition of …

comparing expected risk-free rates across assets. Expected risk-free rates are allowed to vary freely over time, constrained … only by the fact that they are equal across (risk-adjusted) assets. Assets are allowed to have general risk characteristics … of both data and estimation. We find that expected risk-free rates vary dramatically over time, unlike short interest …