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Investment, Expectations and Uncertainty: Empirical Evidence on the Relevance of Firm Size


  • Mark J. Koetse

    () (Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam)

  • Arno J. van der Vlist

    () (Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam)

  • Henri L.F. de Groot

    () (Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam)


This 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.

Suggested Citation

  • Mark J. Koetse & Arno J. van der Vlist & Henri L.F. de Groot, 2003. "Investment, Expectations and Uncertainty: Empirical Evidence on the Relevance of Firm Size," Tinbergen Institute Discussion Papers 03-025/3, Tinbergen Institute.
  • Handle: RePEc:tin:wpaper:20030025

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    Investment; Expectations; Uncertainty; Firm size.;

    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; Prices

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