We present a model of firm investment under uncertainty and partial irreversibility in which uncertainty is represented … impact the optimal investment and disinvestment policies, and how the presence oflarge negative jumps can drastically affect … negative effect of uncertainty on firm investment decisions. We test these predictions on a panel dataset of UK firms: we first …

We consider the classical investment timing problem in a framework where the instantaneous volatility of the project … value is itself given by a stochastic process, hence lifting the old question about the investment-uncertainty relationship … solutions for the investment timing problem using the methodology introduced by Fouque et. al. (2000). In particular we show …

adjustment costs appear important at small plants, but large plants exhibit lumpy investment and substantial investment in …