Investment, Expectations and Uncertainty: Empirical Evidence on the Relevance of Firm Size
AbstractThis paper analyses the effect of uncertainty on investment spending. We analyse twotypes of investment, i.e. aggregate investment and investment in energy saving technologies,using subjective evaluations of expectations and uncertainty of Dutch firms in 1997. Weestimate several models distinguishing between small and large firms. The results suggest thatinvestments in energy saving technologies in small firms are largely cost driven, whereas inlarge firms they are an integral part of general investment spending. Furthermore, expectationsand uncertainty have important although different effects on investment spending in small andlarge firms. We find evidence, at least for small firms, that there are important differencesbetween the effects of uncertainty around input and output variables.
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 03-025/3.
Date of creation: 19 Mar 2003
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Investment; Expectations; Uncertainty; Firm size.;
Find related papers by JEL classification:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply (the Commons)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-04-09 (All new papers)
- NEP-ENT-2003-04-09 (Entrepreneurship)
- NEP-FIN-2003-04-09 (Finance)
- NEP-IND-2003-04-09 (Industrial Organization)
- NEP-MAC-2003-04-09 (Macroeconomics)
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