Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82683
Authors: 
Carlsson, Mikael
Year of Publication: 
2004
Series/Report no.: 
Working Paper, Department of Economics, Uppsala University 2004:17
Abstract: 
This paper provides empirical evidence on the dynamic effects of uncertainty on firm-level capital accumulation. A novelty in this paper is that the firm-level uncertainty indicator is motivated and derived from a theoretical model, the neoclassical investment model with time to build. This model also serves as the base for the empirical work, where an error-correction approach is employed. I find a negative effect of uncertainty on capital accumulation, both in the short and the long run. This outcome cannot be explained by the model alone. Instead, the results suggest that the predominant mechanism at work stems from irreversibility constraints.
Subjects: 
Investment
Uncertainty
Dynamic Panel Data Models
JEL: 
C33
D21
D80
E22
Document Type: 
Working Paper

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