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Is the investment-uncertainty relationship non-linear? : an emperical [i.e. empirical] analysis for the Netherlands

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Author Info

  • Bo, H.
  • Lensink, R.

    (Groningen University)

Abstract

We examine the investment-uncertainty relationship for a panel of Dutch manufacturing firms. The system generalised method of moments (GMM) estimates suggests that the effect of uncertainty on investment is non-linear: for low levels of uncertainty an increase in uncertainty has a positive effect on investment, whereas for high levels of uncertainty an increase in uncertainty lowers investment. This result is in line with a number of theoretical studies, but has never been demonstrated empirically.

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File URL: http://irs.ub.rug.nl/ppn/240961293
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Bibliographic Info

Paper provided by University of Groningen, Research Institute SOM (Systems, Organisations and Management) in its series Research Report with number 00E44.

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Date of creation: 2000
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Handle: RePEc:dgr:rugsom:00e44

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Postal: PO Box 800, 9700 AV Groningen
Phone: +31 50 363 7185
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Web page: http://som.eldoc.ub.rug.nl/
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