Allocation Effects of Uncertainty on Resources in Japan

Mustafa Caglayan () and Bing Xu ()

No 1306, CFI Discussion Papers from Centre for Finance and Investment, Heriot Watt University

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 ï¬ rms. We show that an increase in uncertainty leads to the narrowing of the cross section dispersion of investment rate and vice versa. This ï¬ nding suggests that ï¬ rms’ ï¬ xed capital investment behavior becomes more homogenous 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: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:hwe:cfidps:1306

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