EconPapers    
Economics at your fingertips  
 

The Effect of Uncertainty on Investment: Some Stylized Facts

John Leahy () and Toni Whited ()

Journal of Money, Credit and Banking, 1996, vol. 28, issue 1, 64-83

Abstract: The theoretical relationship between investment and uncertainty is ambiguous. This paper briefly surveys the insights that theory has to offer and then runs a series of simple tests aimed at evaluating the empirical significance of various theoretical effects. The authors' results from a panel of U.S. manufacturing firms indicate a negative effect of uncertainty on investment consistent with theories of irreversible investment. They find no evidence for a positive effect via the channel of the convexity of the marginal product of capital and find no evidence for the presence of a CAPM-based effect of risk. Copyright 1996 by Ohio State University Press.

Date: 1996
References: Add references at CitEc
Citations: View citations in EconPapers (283) Track citations by RSS feed

Downloads: (external link)
http://links.jstor.org/sici?sici=0022-2879%2819960 ... 0.CO%3B2-5&origin=bc full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
Working Paper: The Effect of Uncertainty on Investment: Some Stylized Facts (1995) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mcb:jmoncb:v:28:y:1996:i:1:p:64-83

Access Statistics for this article

Journal of Money, Credit and Banking is currently edited by Robert deYoung, Paul Evans, Pok-Sang Lam and Kenneth D. West

More articles in Journal of Money, Credit and Banking from Blackwell Publishing
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing ().

 
Page updated 2019-09-14
Handle: RePEc:mcb:jmoncb:v:28:y:1996:i:1:p:64-83