Exploring the role of uncertainty for corporate investment decisions in Germany

Ulf von Kalckreuth

Swiss Journal of Economics and Statistics (SJES), 2003, vol. 139, issue II, 173-206

Abstract: This paper studies the impact of sales uncertainty on firms' investment outlays using the database of the Deutsche Bundesbank's corporate balance sheet statistics. The sample used for estimation is a panel of 4'234 west German manufacturing firms with 33'217 observations, covering the years 1987-1997. In 1996, these firms accounted for 49.3% of the total turnover of German incorporated manufacturers. As uncertainty indicators, we construct firm-specific, time varying volatility measures. Using Within estimators and GMM techniques, we find a moderately strong and consistently negative effect of uncertainty on investment. If the uncertainty indicator is increased by one standard deviation, the predicted investment demand will fall by about 3.7 % of its mean.

Keywords: Investment; Uncertainty; Panel Estimation (search for similar items in EconPapers)
JEL-codes: C23 D21 L60 (search for similar items in EconPapers)
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

Downloads: (external link)
http://www.sjes.ch/papers/2003-II-3.pdf (application/pdf)

Related works:
Working Paper: Exploring the role of uncertainty for corporate investment decisions in Germany (2000)
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:ses:arsjes:2003-ii-3

Access Statistics for this article

Swiss Journal of Economics and Statistics (SJES) is currently edited by Marius Brülhart

More articles in Swiss Journal of Economics and Statistics (SJES) from Swiss Society of Economics and Statistics (SSES) Contact information at EDIRC.
Bibliographic data for series maintained by Kurt Schmidheiny ().