Firms' investment decisions in response to demand and price uncertainty
Author
Abstract
Suggested Citation
Download full text from publisher
Other versions of this item:
- Catherine Fuss & Philip Vermeulen, 2008. "Firms' investment decisions in response to demand and price uncertainty," Applied Economics, Taylor & Francis Journals, vol. 40(18), pages 2337-2351.
- Fuss, Catherine & Vermeulen, Philip, 2004. "Firms' investment decisions in response to demand and price uncertainty," Working Paper Series 347, European Central Bank.
References listed on IDEAS
- Giordani, Paolo & Soderlind, Paul, 2003.
"Inflation forecast uncertainty,"
European Economic Review, Elsevier, vol. 47(6), pages 1037-1059, December.
- Giordani, Paolo & Soderlind, Paul, 2000. "Inflation Forecast Uncertainty," SSE/EFI Working Paper Series in Economics and Finance 384, Stockholm School of Economics, revised 06 Nov 2001.
- Söderlind, Paul, 2000. "Inflation Forecast Uncertainty," CEPR Discussion Papers 2499, C.E.P.R. Discussion Papers.
- Luigi Guiso & Giuseppe Parigi, 1999.
"Investment and Demand Uncertainty,"
The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 185-227.
- Guiso, L. & Parigi, G., 1996. "Investment and Demand Uncertainty," Papers 289, Banca Italia - Servizio di Studi.
- Guiso, Luigi & Parigi, Giuseppe, 1996. "Investment and Demand Uncertainty," CEPR Discussion Papers 1497, C.E.P.R. Discussion Papers.
- Nick Bloom & Stephen Bond & John Van Reenen, 2007.
"Uncertainty and Investment Dynamics,"
The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(2), pages 391-415.
- Van Reenen, John & Bloom, Nick & Bond, Steve, 2006. "Uncertainty and investment dynamics," LSE Research Online Documents on Economics 2645, London School of Economics and Political Science, LSE Library.
- Nick Bloom & John Van Reenen & Stephen Bond, 2006. "Uncertainty and Investment Dynamics," NBER Working Papers 12383, National Bureau of Economic Research, Inc.
- Nick Bloom & Stephen Bond & John Van Reenen, 2006. "Uncertainty and Investment Dynamics," CEP Discussion Papers dp0739, Centre for Economic Performance, LSE.
- Pindyck, Robert S, 1993. "A Note on Competitive Investment under Uncertainty," American Economic Review, American Economic Association, vol. 83(1), pages 273-277, March.
- Arellano, Manuel & Bover, Olympia, 1995.
"Another look at the instrumental variable estimation of error-components models,"
Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
- M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers dp0007, Centre for Economic Performance, LSE.
- Andrew B. Abel & Avinash K. Dixit & Janice B. Eberly & Robert S. Pindyck, "undated".
"Options, the Value of Capital, and Investment,"
Rodney L. White Center for Financial Research Working Papers
15-95, Wharton School Rodney L. White Center for Financial Research.
- Abel, Andrew B., 1952-, 1995. "Options, the value of capital, and investment," Working papers 3843-95., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Andrew B. Abel & Avinash K. Dixit & Janice C. Eberly & Robert S. Pindyck, 1995. "Options, the Value of Capital, and Investment," NBER Working Papers 5227, National Bureau of Economic Research, Inc.
- Leahy, John V & Whited, Toni M, 1996.
"The Effect of Uncertainty on Investment: Some Stylized Facts,"
Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(1), pages 64-83, February.
- John V. Leahy & Toni M. Whited, 1995. "The Effect of Uncertainty on Investment: Some Stylized Facts," NBER Working Papers 4986, National Bureau of Economic Research, Inc.
- Frank Windmeijer, 2000. "A finite sample correction for the variance of linear two-step GMM estimators," IFS Working Papers W00/19, Institute for Fiscal Studies.
- Abel, Andrew B. & Eberly, Janice C., 1997. "An exact solution for the investment and value of a firm facing uncertainty, adjustment costs, and irreversibility," Journal of Economic Dynamics and Control, Elsevier, vol. 21(4-5), pages 831-852, May.
- Abel, Andrew B. & Eberly, Janice C., 1999.
"The effects of irreversibility and uncertainty on capital accumulation,"
Journal of Monetary Economics, Elsevier, vol. 44(3), pages 339-377, December.
- Andrew B. Abel & Janice B. Eberly, "undated". "The Effects of Irreversibility and Uncertainty on Capital Accumulation," Rodney L. White Center for Financial Research Working Papers 21-95, Wharton School Rodney L. White Center for Financial Research.
- Andrew B. Abel & Janice C. Eberly, 1995. "The Effects of Irreversibility and Uncertainty on Capital Accumulation," NBER Working Papers 5363, National Bureau of Economic Research, Inc.
- Stephen Bond & Julie Ann Elston & Jacques Mairesse & Benoît Mulkay, 2003.
"Financial Factors and Investment in Belgium, France, Germany, and the United Kingdom: A Comparison Using Company Panel Data,"
The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 153-165, February.
- Benoit Mulkay & Stephen Bond & Julie Ann Elston & Jacques Mairesse & Benoît Mulkay, 2003. "Financial Factors and Investment in Belgium, France, Germany, and the United Kingdom: A Comparison Using Company Panel Data," Post-Print hal-01815075, HAL.
- Ghosal, Vivek & Loungani, Prakash, 1996.
"Product Market Competition and the Impact of Price Uncertainty on Investment: Some Evidence from US Manufacturing Industries,"
Journal of Industrial Economics, Wiley Blackwell, vol. 44(2), pages 217-228, June.
- Vivek Ghosal & Prakash Loungani, 1995. "Product market competition and the impact of price uncertainty on investment: some evidence from U.S. manufacturing industries," International Finance Discussion Papers 517, Board of Governors of the Federal Reserve System (U.S.).
- Steven M. Fazzari & R. Glenn Hubbard & Bruce C. Petersen, 1988.
"Financing Constraints and Corporate Investment,"
Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(1), pages 141-206.
- Steven Fazzari & R. Glenn Hubbard & Bruce C. Petersen, 1987. "Financing Constraints and Corporate Investment," NBER Working Papers 2387, National Bureau of Economic Research, Inc.
- Henley, Andrew & Carruth, Alan & Dickerson, Andy, 2003. "Industry-wide versus firm-specific uncertainty and investment: British company panel data evidence," Economics Letters, Elsevier, vol. 78(1), pages 87-92, January.
- Paxil Butzen & Catherine Fuss & Philip Vermeulen, 2002.
"The interest rate and crédit channels in Belgium: an investigation with micro-level firm data,"
Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 45(3), pages 5-36.
- Paul Butzen & Catherine Fuss & Philip Vermeulen, 2001. "The interest rate and credit channels in Belgium: an investigation with micro-level firm data," Working Paper Research 18, National Bank of Belgium.
- Butzen, Paul & Fuss, Catherine & Vermeulen, Philip, 2001. "The interest rate and credit channels in Belgium: An investigation with micro-level firm data," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 A3-1, International Conferences on Panel Data.
- Butzen, Paul & Fuss, Catherine & Vermeulen, Philip, 2001. "The interest rate and credit channel in Belgium: an investigation with micro-level firm data," Working Paper Series 107, European Central Bank.
- Bulan, Laarni T., 2005. "Real options, irreversible investment and firm uncertainty: New evidence from U.S. firms," Review of Financial Economics, Elsevier, vol. 14(3-4), pages 255-279.
- Blundell, Richard & Bond, Stephen, 1998.
"Initial conditions and moment restrictions in dynamic panel data models,"
Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
- R Blundell & Steven Bond, "undated". "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
- Richard Blundell & Stephen Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
- Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
- Robert McDonald & Daniel Siegel, 1986. "The Value of Waiting to Invest," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(4), pages 707-727.
- Hong Bo, 2002. "Idiosyncratic Uncertainty and Firm Investment," Australian Economic Papers, Wiley Blackwell, vol. 41(1), pages 1-14, March.
- Andrew B. Abel & Avinash K. Dixit & Janice C. Eberly & Robert S. Pindyck, 1996.
"Options, the Value of Capital, and Investment,"
The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(3), pages 753-777.
- Andrew B. Abel & Avinash K. Dixit & Janice B. Eberly & Robert S. Pindyck, "undated". "Options, the Value of Capital, and Investment," Rodney L. White Center for Financial Research Working Papers 15-95, Wharton School Rodney L. White Center for Financial Research.
- Andrew B. Abel & Avinash K. Dixit & Janice C. Eberly & Robert S. Pindyck, 1995. "Options, the Value of Capital, and Investment," NBER Working Papers 5227, National Bureau of Economic Research, Inc.
- Vivek Ghosal & Prakash Loungani, 2000. "The Differential Impact of Uncertainty on Investment in Small and Large Businesses," The Review of Economics and Statistics, MIT Press, vol. 82(2), pages 338-343, May.
- Caballero, Ricardo J, 1991. "On the Sign of the Investment-Uncertainty Relationship," American Economic Review, American Economic Association, vol. 81(1), pages 279-288, March.
- Alan Carruth & Andy Dickerson & Andrew Henley, 2000.
"What do We Know About Investment Under Uncertainty?,"
Journal of Economic Surveys, Wiley Blackwell, vol. 14(2), pages 119-154, April.
- Alan Carruth & Andy Dickerson & Andrew Henley, 1998. "What Do We Know About Investment Under Uncertainty?," Studies in Economics 9804, School of Economics, University of Kent.
- repec:bla:scotjp:v:48:y:2001:i:4:p:361-82 is not listed on IDEAS
- Ciaran Driver & Katsushi Imai & Paul Temple & Giovanni Urga, 2004. "The effect of uncertainty on UK investment authorisation: Homogenous vs. heterogeneous estimators," Empirical Economics, Springer, vol. 29(1), pages 115-128, January.
- Michela Nardo, 2003. "The Quantification of Qualitative Survey Data: A Critical Assessment," Journal of Economic Surveys, Wiley Blackwell, vol. 17(5), pages 645-668, December.
- Hartman, Richard, 1972. "The effects of price and cost uncertainty on investment," Journal of Economic Theory, Elsevier, vol. 5(2), pages 258-266, October.
- repec:bla:jecsur:v:14:y:2000:i:2:p:119-53 is not listed on IDEAS
- Paul Temple & Giovanni Urga & Ciaran Driver, 2001. "The Influence of Uncertainty on Investment in the UK: A Macro or Micro Phenomenon?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 48(4), pages 361-382, September.
- repec:bla:econom:v:42:y:1975:i:166:p:123-38 is not listed on IDEAS
- Ulf von Kalckreuth, 2003.
"Exploring the role of uncertainty for corporate investment decisions in Germany,"
Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 139(II), pages 173-206, June.
- von Kalckreuth, Ulf, 2000. "Exploring the role of uncertainty for corporate investment decisions in Germany," Discussion Paper Series 1: Economic Studies 2000,05, Deutsche Bundesbank.
- Abel, Andrew B, 1983. "Optimal Investment under Uncertainty," American Economic Review, American Economic Association, vol. 73(1), pages 228-233, March.
- Paola Caselli & Patrizio Pagano & Fabiano Schivardi, 2003. "Uncertainty and the slowdown of capital accumulation in Europe," Applied Economics, Taylor & Francis Journals, vol. 35(1), pages 79-89.
- Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
- Bomberger, William A, 1996. "Disagreement as a Measure of Uncertainty," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(3), pages 381-392, August.
- Johannes Fedderke, 2004. "Investment in Fixed Capital Stock: Testing for the Impact of Sectoral and Systemic Uncertainty," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(2), pages 165-187, May.
- Bond, Stephen Roy & Van Reenen, John & Bloom, Nicholas, 2003. "Uncertainty and Company Investment Dynamics: Empirical Evidence for UK Firms," CEPR Discussion Papers 4025, C.E.P.R. Discussion Papers.
Most related items
These are the items that most often cite the same works as this one and are cited by the same works as this one.- Bontempi, Maria Elena & Golinelli, Roberto & Parigi, Giuseppe, 2010.
"Why demand uncertainty curbs investment: Evidence from a panel of Italian manufacturing firms,"
Journal of Macroeconomics, Elsevier, vol. 32(1), pages 218-238, March.
- Elena Bontempi & Roberto Golinelli & Giuseppe Parigi, 2007. "Why demand uncertainty curbs investment: Evidence froma a panel of Italian manufacturing firms," Temi di discussione (Economic working papers) 621, Bank of Italy, Economic Research and International Relations Area.
- Marina Riem, 2016. "Corporate investment decisions under political uncertainty," ifo Working Paper Series 221, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
- Paul Butzen & Catherine Fuss & Philip Vermeulen, 2002. "The impact of uncertainty on investment plans," Working Paper Research 24, National Bank of Belgium.
- Henriques, Irene & Sadorsky, Perry, 2011. "The effect of oil price volatility on strategic investment," Energy Economics, Elsevier, vol. 33(1), pages 79-87, January.
- Vasia Panousi & Dimitris Papanikolaou, 2012.
"Investment, Idiosyncratic Risk, and Ownership,"
Journal of Finance, American Finance Association, vol. 67(3), pages 1113-1148, June.
- Panousi, Vasia & Papanikolaou, Dimitris, 2009. "Investment, idiosyncratic risk, and ownership," MPRA Paper 24239, University Library of Munich, Germany.
- Vasia Panousi & Dimitris Papanikolaou, 2011. "Investment, idiosyncratic risk, and ownership," Finance and Economics Discussion Series 2011-54, Board of Governors of the Federal Reserve System (U.S.).
- Ulf von Kalckreuth, 2003.
"Exploring the role of uncertainty for corporate investment decisions in Germany,"
Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 139(II), pages 173-206, June.
- von Kalckreuth, Ulf, 2000. "Exploring the role of uncertainty for corporate investment decisions in Germany," Discussion Paper Series 1: Economic Studies 2000,05, Deutsche Bundesbank.
- Hjalmar Böhm & Michael Funke & Nikolaus A. Siegfried, 1999.
"Discovering the Link between Uncertainty and Investment - Microeconometric Evidence from Germany,"
Quantitative Macroeconomics Working Papers
19906, Hamburg University, Department of Economics.
- Hjalmar Boehm & Michael Funke & Nikolaus A. Siegfried, 2000. "Discovering the Link Between Uncertainty and Investment - Microeconometric Evidence from Germany," Econometric Society World Congress 2000 Contributed Papers 0112, Econometric Society.
- Mohn, Klaus & Misund, Bård, 2009. "Investment and uncertainty in the international oil and gas industry," Energy Economics, Elsevier, vol. 31(2), pages 240-248, March.
- Driver, Ciaran & Temple, Paul & Urga, Giovanni, 2008. "Real options -- delay vs. pre-emption: Do industrial characteristics matter?," International Journal of Industrial Organization, Elsevier, vol. 26(2), pages 532-545, March.
- Alessandra Guariglia & John Tsoukalas & Serafeim Tsoukas, 2010. "Investment, irreversibility, and financing constraints in transition economies," Discussion Papers 10/03, University of Nottingham, School of Economics.
- Aytekin GÜVEN & Arzu AKKOYUNLU-WIGLEY, 2018. "The Effects of Market Structure on Uncertainty-Investment Relationship: Evidence from Turkish Manufacturing Industry," Sosyoekonomi Journal, Sosyoekonomi Society, issue 26(37).
- Laarni T. Bulan, 2005. "Real options, irreversible investment and firm uncertainty: New evidence from U.S. firms," Review of Financial Economics, John Wiley & Sons, vol. 14(3-4), pages 255-279.
- Bo, Hong & Zhang, Zhihai, 2002. "The impact of uncertainty on firm investment: evidence from machinery industry in Liaoning province of China," Economic Systems, Elsevier, vol. 26(4), pages 335-352, December.
- Nick Bloom & Stephen Bond & John Van Reenen, 2007.
"Uncertainty and Investment Dynamics,"
The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(2), pages 391-415.
- Nick Bloom & John Van Reenen & Stephen Bond, 2006. "Uncertainty and Investment Dynamics," NBER Working Papers 12383, National Bureau of Economic Research, Inc.
- Nick Bloom & Stephen Bond & John Van Reenen, 2006. "Uncertainty and Investment Dynamics," CEP Discussion Papers dp0739, Centre for Economic Performance, LSE.
- Van Reenen, John & Bloom, Nick & Bond, Steve, 2006. "Uncertainty and investment dynamics," LSE Research Online Documents on Economics 2645, London School of Economics and Political Science, LSE Library.
- Kaido Kepp & Kadri Männasoo, 2021. "Investment irreversibility and cyclical adversity: Implications for the financial performance of European manufacturing companies," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(7), pages 1665-1678, October.
- Gianluca Femminis, 2019.
"Risk aversion heterogeneity and the investment–uncertainty relationship,"
Journal of Economics, Springer, vol. 127(3), pages 223-264, August.
- Gianluca Femminis, 2012. "Risk aversion heterogeneity and the investment-uncertainty relationship," DISCE - Quaderni dell'Istituto di Teoria Economica e Metodi Quantitativi itemq1260, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
- Caruso, Massimo, 2001. "Investment and the persistence of price uncertainty," Research in Economics, Elsevier, vol. 55(2), pages 189-217, June.
- Chortareas, Georgios & Noikokyris, Emmanouil & Rakeeb, Fathima Roshan, 2021. "Investment, firm-specific uncertainty, and market power in South Africa," Economic Modelling, Elsevier, vol. 96(C), pages 389-395.
- Saltari, Enrico & Ticchi, Davide, 2007.
"Risk aversion, intertemporal substitution, and the aggregate investment-uncertainty relationship,"
Journal of Monetary Economics, Elsevier, vol. 54(3), pages 622-648, April.
- Enrico Saltari & Davide Ticchi, 2002. "Risk aversion, intertemporal substitution, and the aggregate investment-uncertainty relationship," Working Papers in Public Economics 69, University of Rome La Sapienza, Department of Economics and Law.
- Gabriela López Noria & Juan José Zamudio Fernández, 2018. "The effect of uncertainty on foreign direct investment: The case of Mexico," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 33(1), pages 117-149.
More about this item
Keywords
investment; uncertainty; real options; survey data; panel data;All these keywords.
JEL classification:
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
Statistics
Access and download statisticsCorrections
All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbb:reswpp:200404-2. See general information about how to correct material in RePEc.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/bnbgvbe.html .
Please note that corrections may take a couple of weeks to filter through the various RePEc services.