On the Investment Sensitivity of Debt under Uncertainty

Christopher Baum, Mustafa Caglayan () and Oleksandr Talavera ()

No 686, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: We investigate the impact of debt on a panel of U.S. manufacturing firms' capital investment behavior as the underlying firm-specific and macroeconomic uncertainty changes. Our estimates show that the influence of leverage on capital investment may be stimulating or mitigating depending on the effects of uncertainty.

Keywords: capital investment; leverage; uncertainty (search for similar items in EconPapers)
JEL-codes: D81 E22 G31 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2008-06-21
New Economics Papers: this item is included in nep-bec, nep-cfn and nep-mac
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Published, Economics Letters, 2010, 106:25-27

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Journal Article: On the investment sensitivity of debt under uncertainty (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:686

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