Does Demand and Price Uncertainty affect Belgian and Spanish Corporate Investment? | Zendy

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Does Demand and Price Uncertainty affect Belgian and Spanish Corporate Investment?

Author(s) -

Marga Peeters

Publication year - 2001

Publication title -

recherches économiques de louvain

Language(s) - English

Resource type - Journals

eISSN - 1782-1495

pISSN - 0770-4518

DOI - 10.1017/s0770451800004334

Subject(s) - economics , leverage (statistics) , investment (military) , econometrics , panel data , standard deviation , monetary economics , financial economics , microeconomics , mathematics , statistics , politics , political science , law

This paper investigates erapirically the influence of uncertainty on corporate investment. Uncertainty of demand, output prices and investment prices are measured by the standard deviation of (pre-)filtered Belgian (1984-1992) and Spanish (1983-1993) panel data, and included as explanatory variables in the investment equations derived from a neo-classical model with financial constraints. GMM-results indicate that investment behaviour towards output price uncertainty differs significantly in conjecture with a firm's size and leverage.

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