| Author: | Sakellaris, P. |
| Title: | Investment under uncertain market conditions |
| Journal: | Review of Economics and Statistics
1995 : AUG, VOL. 77:3, p. 455-469 |
| Index terms: | INVESTMENT UNCERTAINTY MARKET CONDITIONS |
| Language: | eng |
| Abstract: | This paper studies the responsiveness of firm investment to shocks in the input factor and output prices (the market conditions) by using stock market information on excess returns. The q theory of investment is modified to allow for heterogeneous capital, ex post inflexible technology, and irreversible investment. A structural model linking the excess returns to a firm's equity to the firm's investment history and the evolution of the market conditions is estimated using a panel of U.S. manufacturing firms. |
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