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Firm-level investment in the extractive industry from CEE countries: the role of macroeconomic uncertainty and internal conditions

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  • Claudiu Tiberiu Albulescu

    (UPT - Universității Politehnica Timișoara [România] = Polytechnic University of Timişoara [Romania] = Université polytechnique de Timișoara [Roumanie], CRIEF [Poitiers] - Centre de recherche sur l'intégration économique et financière [EA 2249] - UP - Université de Poitiers = University of Poitiers)

  • Şerban Miclea

    (UPT - Universității Politehnica Timișoara [România] = Polytechnic University of Timişoara [Romania] = Université polytechnique de Timișoara [Roumanie])

  • Simina Silvana Suciu

    (UPT - Universității Politehnica Timișoara [România] = Polytechnic University of Timişoara [Romania] = Université polytechnique de Timișoara [Roumanie])

  • Matei Tămăşilă

    (UPT - Universității Politehnica Timișoara [România] = Polytechnic University of Timişoara [Romania] = Université polytechnique de Timișoara [Roumanie])

Abstract

This paper investigates the impact of external and internal conditions on firms' investment in CEE countries, applying a panel data analysis, over the time-span 2008–2014. We use AMADEUS statistics for 412 companies and we focus on the extractive industry. The external conditions are associated with the macroeconomic uncertainty related to the economic growth and price level, while for the internal conditions we have retained as explanatory variables the leverage and liquidity ratios. The firms' investment dynamics is computed as the growth rate of fixed assets. Our results obtained using static and dynamic estimators, show that both external and internal conditions influence the firms' investment decision. The inflation uncertainty has a positive and significant impact on investment, providing evidence in the favor of the growth-option theory. The liquidity has a positive and significant influence, while the impact of the leverage and economic growth uncertainty is significant only under the dynamic specification. Our results are robust under different specifications of macroeconomic uncertainty and sample structure.

Suggested Citation

  • Claudiu Tiberiu Albulescu & Şerban Miclea & Simina Silvana Suciu & Matei Tămăşilă, 2018. "Firm-level investment in the extractive industry from CEE countries: the role of macroeconomic uncertainty and internal conditions," Post-Print hal-02517371, HAL.
    • Handle: RePEc:hal:journl:hal-02517371
    DOI: 10.1007/s40821-017-0079-3
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    Cited by:

    1. Claudiu Tiberiu Albulescu, 2020. "Investment Behaviour and Firms’ Financial Performance: A Comparative Analysis Using Firm-Level Data from the Wine Industry," International Journal of Management, Knowledge and Learning, ToKnowPress, vol. 9(1), pages 75-94.
    2. Claudiu Tiberiu Albulescu & Matei Tămășilă & Ilie Mihai Tăucean, 2021. "The Nonlinear Relationship Between Firm Size and Growth in the Automotive Industry," Journal of Industry, Competition and Trade, Springer, vol. 21(3), pages 445-463, September.
    3. Cappa, Francesco & Cetrini, Giorgio & Oriani, Raffaele, 2020. "The impact of corporate strategy on capital structure: evidence from Italian listed firms," The Quarterly Review of Economics and Finance, Elsevier, vol. 76(C), pages 379-385.
    4. Milan Trajkovic, 2022. "Impact of macroeconomic stability on private fixed investments in selected countries of Central and Southeast Europe," Working Papers Bulletin 7, National Bank of Serbia.
    5. Stelian STANCU & Eugenia GRECU & Mirela Ionela ACELEANU & Daniela Livia TRAŞCĂ & Claudiu Tiberiu ALBULESCU, 2021. "Does Firm Size Matters for Firm Growth? Evidence from the Romanian Health Sector," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 17-31, December.
    6. Muhammad Arif Khan & Xuezhi Qin & Khalil Jebran, 2020. "Uncertainty and leverage nexus: does trade credit matter?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 10(3), pages 355-389, September.

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