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

Published online by Cambridge University Press:  17 August 2016

Marga Peeters
Marga Peeters*
Affiliation:
Econometric Research and Special Studies Department De Nederlandsche Bank NV**
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Summary

This paper investigates empirically 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.

Résumé

Résumé

Cet article étudie empiriquement l’influence de l’incertitude sur les investissements d’entreprise. L’incertitude de la demande, les prix de vente et les prix d’investissement sont mesurés par des déviations standards de données préfiltrées de paniers belges et espagnoles. Ils sont repris comme variables explicatives pour le comportement d’investissement d’entreprises dans un modèle néo-classique avec contraintes financières. L’impact de l’incertitude des prix de vente sur l’investissement y varie fortement d’après la taille de l’entreprise.

Keywords

Investmentuncertaintyfinancial factorsC23C52D21D92Investissementincertitudefacteurs financiersC23C52D21D92
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 67 , Issue 3 , 2001 , pp. 235 - 255
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 2001 

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Footnotes

*

This paper was initiated when I was working as a fellow at the Bank of Spain. I thank Francisco de Castro for excellent assistence on the Spanish data and Fernando Barrán for his advice on the Belgian data. For comments on the paper I want to thank Javier Vallés, two anonymous referees, Bob Chirinko, Vivek Ghosal, David López-Salido, Olympia Bover, Juan Dolado, Jeffrey Franks and José Viñals. All errors are mine.

**

P.O. Box 98, 1000 AB Amsterdam, The Netherlands, e-mail: H.M.M.Peeters@DNB.NL

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