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- Title
Is the Investment–Uncertainty Relationship Nonlinear? An Empirical Analysis for the Netherlands.
- Authors
Hong Bo; Lensin, Robert
- Abstract
We examine the investment–uncertainty relationship for a panel of Dutch non-financial firms. The system generalized method of moments (GMM) estimates suggest that the effect of uncertainty on investment is nonlinear: for low levels of uncertainty an increase in uncertainty has a positive effect on investment, while for high levels of uncertainty an increase in uncertainty lowers investment. This result is in line with a number of theoretical studies, but has never been documented empirically.
- Subjects
NETHERLANDS; DUTCH corporations; INVESTMENTS; UNCERTAINTY; GENERALIZED method of moments
- Publication
Economica, 2005, Vol 72, Issue 286, p307
- ISSN
0013-0427
- Publication type
Article
- DOI
10.1111/j.0013-0427.2005.00416.x