On the Investment Sensitivity of Debt under Uncertainty
AbstractWe investigate the impact of debt on a panel of U.S. manufacturing firms' capital investment behavior as the underlying firm-specific and macroeconomic uncertainty changes. Our estimates show that the influence of leverage on capital investment may be stimulating or mitigating depending on the effects of uncertainty.
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Bibliographic InfoPaper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 686.
Length: 14 pages
Date of creation: 21 Jun 2008
Date of revision:
Publication status: published, Economics Letters, 2010, 106:25-27
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Postal: Boston College, 140 Commonwealth Avenue, Chestnut Hill MA 02467 USA
Web page: http://fmwww.bc.edu/EC/
More information through EDIRC
capital investment; leverage; uncertainty;
Other versions of this item:
- Baum, Christopher F. & Caglayan, Mustafa & Talavera, Oleksandr, 2010. "On the investment sensitivity of debt under uncertainty," Economics Letters, Elsevier, vol. 106(1), pages 25-27, January.
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-06-27 (All new papers)
- NEP-BEC-2008-06-27 (Business Economics)
- NEP-CFN-2008-06-27 (Corporate Finance)
- NEP-MAC-2008-06-27 (Macroeconomics)
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