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The Impact of Uncertainty on Investment Plans

Butzen, Paul - 2010

features of the decision formation process and, therefore, it is most closely related to economic theory. Business investment … is normally planned well in advance, because it involves time and costs to implement, and theory describes the behaviour … investment. Hence, our results seem to confirm to predictions of the real option theory …

Persistent link: https://www.econbiz.de/10013136992

To Bet or Not to Bet : Copper Price Uncertainty and Investment in Chile

Comelli, Fabio - 2017

A strand of research documents Chile's copper dependence hence significant exposure to terms of trade shocks. Copper prices' sharp decline and forecast uncertainty since the end of the commodity super-cycle has rekindled the debate on Chile's adjustment capacity to external shocks. Following...

Persistent link: https://www.econbiz.de/10012966554

The real options effect of uncertainty on investment and labour demand

Bloom, Nicholas - 2000

This paper shows that, contrary to common beliefs, the real options effect of uncertainty plays no role in the long run rate of investment. This is proven for both the standard investment model with Cobb-Douglas production and Brownian motion demand, and also for a broader class of models with...

Persistent link: https://www.econbiz.de/10011538116

The real options effect of uncertainty on investment and labour demand

Bloom, Nicholas - 2000

Persistent link: https://www.econbiz.de/10010330346

Investment Dynamics in Italy : Financing Constraints, Demand and Uncertainty

Bond, Stephen R. - 2016

In this paper we describe the investment behavior of manufacturing firms in Italy between 1995 and 2013 and we investigate the most important factors leading to the decline in investment since 2008. We estimate an error correction model for investment using information on firms' demand...

Persistent link: https://www.econbiz.de/10012999590

Uncertainty Determinants of Corporate Liquidity

Baum, Christopher F.; Caglayan, Mustafa; Stephan, Andreas; … - 2006

This paper investigates the link between the optimal level of non-financial firms? liquid assets and uncertainty. We develop a partial equilibrium model of precautionary demand for liquid assets showing that firms alter their liquidity ratio in response to changes in either macroeconomic or...

Persistent link: https://www.econbiz.de/10010260989

Foreign Direct Investment and Exports with Growing Demand

Rob, Rafael; Vettas, Nikolaos - 2003

that FDI is irreversible and, hence, entails the risk of creating underutilized capacity in the case that the market turns …

Persistent link: https://www.econbiz.de/10014092794

To Buy or Not to Buy? Uncertainty, Irreversibility, and Heterogeneous Investment Dynamics in Italian Company Data

Bond, Stephen R. - 2008

This study tests for the presence of real options effects induced by uncertainty and (partial) irreversibility on fixed capital investment using Italian company data. The approach recognizes that firm-level investment spending may, itself, be aggregated over multiple investment decisions in...

Persistent link: https://www.econbiz.de/10012774316

Short and Long Run Uncertainty

Barrero, Jose Maria - 2018

Uncertainty appears to have both a short-run and a long-run component, which we measure using firm and macro implied volatility data from equity options of 30 days to 5 years duration. We ask what may be driving uncertainty over these different time horizons, finding that policy uncertainty,...

Persistent link: https://www.econbiz.de/10012935896

The Dynamics of Investment Under Uncertainty

Bloom, Nicholas - 2014

We derive robust predictions on the effects of uncertainty on short run investment dynamics in a broad class of models with (partial) irreversibility. When their environment becomes more uncertain firms become more cautious and less responsive to demand shocks. This result contrasts with the...

Persistent link: https://www.econbiz.de/10012710480