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This study tests for the presence of real options effects induced by uncertainty and (partial) irreversibility on fixed capital investment using Italian company data. The approach recognizes that firm-level investment spending may, itself, be aggregated over multiple investment decisions in separate types of capital goods and emphasizes effects of uncertainty on short-run investment dynamics. Using a survey-based measure of uncertainty related to the assessment of managers responsible for the firms' investment plans, the study finds evidence of heterogeneous and nonlinear dynamics pointing to a slower adjustment of investment in response to demand shocks at higher levels of uncertainty. The results also point to an additional source of nonlinearity originating from a convex response of investment to demand shocks.

Business cycles --- Econometric models. --- Econometrics --- Investments: General --- Investments: Bonds --- Investments: Stocks --- Industries: Manufacturing --- 'Panel Data Models --- Spatio-temporal Models' --- Intertemporal Firm Choice and Growth, Investment, or Financing --- Investment --- Capital --- Intangible Capital --- Capacity --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Estimation --- General Financial Markets: General (includes Measurement and Data) --- Industry Studies: Manufacturing: General --- Investment & securities --- Econometrics & economic statistics --- Manufacturing industries --- Macroeconomics --- Stocks --- Estimation techniques --- Bonds --- Manufacturing --- Capital accumulation --- Financial institutions --- Econometric analysis --- Economic sectors --- National accounts --- Econometric models --- Saving and investment --- United Kingdom --- Panel Data Models --- Spatio-temporal Models

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This study investigates the relationship between uncertainty and investment using U.K. data at different levels of aggregation. Motivated by a comparative econometric analysis using a firm-level panel and aggregate time-series data, we analyze the implications of aggregating nonlinear microeconomic processes. Replicating firm-level evidence that uncertainty influences investment dynamics proves to be challenging. Even using perfectly consistent data sources, this requires both exact aggregation of the underlying micro equations, and controlling for the unobserved influences on investment that are commonly subsumed into time dummies in panel studies. These conditions are unlikely to be satisfied in most aggregate econometric studies.

Electronic books. -- local. --- Investments -- Great Britain -- Econometric models. --- Uncertainty -- Econometric models. --- Econometrics --- Investments: Bonds --- Investments: Stocks --- Macroeconomics --- Industries: Manufacturing --- Single Equation Models --- Single Variables: General --- Intertemporal Firm Choice and Growth, Investment, or Financing --- Investment --- Capital --- Intangible Capital --- Capacity --- Industry Studies: Manufacturing: General --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Time-Series Models --- Dynamic Quantile Regressions --- Dynamic Treatment Effect Models --- Diffusion Processes --- State Space Models --- Macroeconomics: Production --- General Financial Markets: General (includes Measurement and Data) --- Manufacturing industries --- Investment & securities --- Econometrics & economic statistics --- Manufacturing --- Stocks --- Time series analysis --- Production growth --- Bonds --- Economic sectors --- Financial institutions --- Econometric analysis --- Production --- Economic theory --- United Kingdom --- Uncertainty --- Investments --- Econometric models.

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Arbitration and award --- Arbitration and award, International

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Zonder onderwerpscode: economie