We analyse empirically the effect of uncertainty on fixed investment based on a panel data set of Japanese … negative relationship between investment and uncertainty is closely related to the degree of irreversibility of capital … manufacturing firms. The uncertainty measure, represented by the conditional standard deviation of the sales growth rate, is …

Uncertainty appears to vary strongly over time, temporarily rising by up to 200% around major shocks like the Cuban … Missile crisis, the assassination of JFK and 9/11. This paper offers the first structural framework to analyze uncertainty …. The parameterized model is then used to simulate a macro uncertainty shock, which produces a rapid drop and rebound in …

This paper investigates erapirically the influence of uncertainty on corporate investment. Uncertainty of demand … with financial constraints. GMM-results indicate that investment behaviour towards output price uncertainty differs …, output prices and investment prices are measured by the standard deviation of (pre-)filtered Belgian (1984-1992) and Spanish …

In this paper we investigate how demand and output price uncertainty affect investment plans of Belgian manufacturing … literature: two reduced form equations and a structural Euler equation. Our results show that uncertainty depresses investment …, uncertainty postpones investment today in favour of investment tomorrow. This effect is stronger for firms with more irreversible …

The real options tradition originally predicted a decreasing relationship between uncertainty and investment, through … the positive effect of higher uncertainty on the trigger level for revenue relative to costs. An opposing effect on the … probability is not the best measure of investment. The sign of the total effect is again ambiguous. This ambiguity is illustrated …

Uncertainty appears to vary strongly over time, temporarily rising by up to 200% around major shocks like the Cuban … Missile crisis, the assassination of JFK and 9/11. This paper offers the first structural framework to analyze uncertainty …. The parameterized model is then used to simulate a macro uncertainty shock, which produces a rapid drop and rebound in …

This paper revisits the important result of the real options approach to investment under uncertainty, which states … that increased uncertainty raises the value of waiting and thus decelerates investment.Typically in this literature … that investment projects are usually considered to have a .nite life.The present paper studies investment projects with …

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 …

investment. Uncertainty increases real option values making firms more cautious when investing or disinvesting. This is confirmed … both numerically for a model with a rich mix of adjustment costs, time-varying uncertainty, and aggregation over investment …This paper shows that, with (partial) irreversibility, higher uncertainty reduces the impact effect of demand shocks on …