Real and financial uncertainty and investment decisions

Calcagnini, Giorgio; Saltari, Enrico

doi:10.1016/s0164-0704(00)00142-7

Cited by 40 publications

(20 citation statements)

References 17 publications

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“…Calcagnini and Saltari (2000) argue that uncertainty can reduce demand for capital, their results indicate the importance of uncertainty effects on the investment. Baker et al (2013) prove that policy concerns account for an unusually high share of overall economic uncertainty, and their results prove the importance of uncertainty regarding policy changes.…”

Section: Literature Reviewmentioning

confidence: 99%

Economic Policy Uncertainty and Housing Returns in Germany: Evidence From a Bootstrap Rolling Window

Lobonţ

et al. 2016

Zb.rad.Ekon.fak.Rij.

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Section: Literature Reviewmentioning

confidence: 99%

Economic Policy Uncertainty and Housing Returns in Germany: Evidence From a Bootstrap Rolling Window

Lobonţ

et al. 2016

Zb.rad.Ekon.fak.Rij.

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“…Driver and Moreton (1991) conclude that while a proxy for uncertainty driven from output growth has a negative long-run effect on aggregate investment, the measure of uncertainty obtained from inflation has none. Calcagnini and Saltari (2000) suggest that while demand uncertainty has a significant negative effect on investment, interest rate uncertainty has none. Huizinga (1993) reports a negative effect on investment for uncertainty proxies obtained from wages and raw materials prices, but a positive effect for a proxy obtained from output prices.…”

Section: The Empirical Literature On Investment and Uncertaintymentioning

confidence: 99%

On the sensitivity of firms' investment to cash flow and uncertainty

Baum

Çağlayan

Talavera

2009

Oxford Economic Papers

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We investigate the analytical and empirical linkages between cash flow, uncertainty and firms' capital investment behavior. Our empirical approach constructs measures of own-and market-specific uncertainty from firms' daily stock returns and S&P 500 index returns along with a CAPM-based risk measure. Our results indicate that even in the presence of important firm-specific variables, uncertainty is an important determinant of firms' investment behavior. Depending on the measure of uncertainty used, investment may be stimulated or curtailed by the effects of uncertainty on its own or through its interactions on cash flow.Keywords: capital investment, cash flow, uncertainty, CAPM JEL: E22, D81, C23 * We are grateful for comments received from seminar participants at Koç University, the University of Strathclyde and the 13th International Conference on Panel Data, University of Cambridge, Fabio Schiantarelli and the constructive suggestions of an anonymous reviewer.

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“…This relation is robust to different model specification and different proxies for uncertainty 11 . In particular, Calcagnini and Saltari (2000) consider demand and interest rate uncertainty and show theoretically that, in presence of irreversibility, they both reduce demand for capital goods. Empirical analysis using aggregate data on the Italian economy confirms the importance of demand uncertainty, while finds no significant role for interest rate uncertainty.…”

Section: Literature Reviewmentioning

confidence: 99%

Common currencies and FDI flows

Schiavo¹

2007

Oxford Economic Papers

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The paper investigates the impact of EMU on foreign direct investment flows. Using the option value approach to investment decisions, it is possible to show how exchange rate uncertainty hinders cross-border investment flows. By permanently fixing bilateral exchange rates, a currency union can then be expected to spur international investment. Results from a gravity model on a sample of OECD countries confirm the hypothesis that currency unions have a positive impact on FDI; moreover, adopting the same currency appears to do more than merely eliminating exchange rate volatility. These findings closely resemble those recently obtained in the trade literature. JEL Codes: F15, F21. Terms of use: Documents in EconStor may

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Real and financial uncertainty and investment decisions

Cited by 40 publications

References 17 publications

Economic Policy Uncertainty and Housing Returns in Germany: Evidence From a Bootstrap Rolling Window

Economic Policy Uncertainty and Housing Returns in Germany: Evidence From a Bootstrap Rolling Window

On the sensitivity of firms' investment to cash flow and uncertainty

Common currencies and FDI flows

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