Allocation effects of uncertainty on resources in Japan

Mustafa Caglayan () and Bing Xu ()

Economics Letters, 2014, vol. 122, issue 1, 23-26

Abstract: This paper provides evidence of a negative association between macroeconomic uncertainty and the cross sectional dispersion of investment rate for a panel of Japanese manufacturing firms. We show that an increase in uncertainty leads to the narrowing of the cross section dispersion of investment rate and vice versa. This finding suggests that firms’ fixed capital investment behavior becomes more homogeneous in times of increased uncertainty.

Keywords: Uncertainty; Investment dispersion; Panel data; Japan (search for similar items in EconPapers)
JEL-codes: C21 D81 E22 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:122:y:2014:i:1:p:23-26

DOI: 10.1016/j.econlet.2013.10.023

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