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| Turvey, Calum G.; Toole, Andrew A.; Kropp, Jaclyn D.. |
| This paper examines the relationship between uncertainty and investment decisions by food and non-food firms. Using hysteresis and the real options paradigm, we review why uncertainty might cause firms to delay investment. In particular, our model looks for a negative relationship between capital invested and uncertainty. In the alternative, if the relationship is positive, this may be consistent with the exercise of growth options or competitive markets. Empirical results are mixed. In one of the four models we present there is clear evidence of hysteresis, that is a negative relationship between year over year investment and uncertainty. The remaining 3 models indicate the opposite, a positive relationship between investment and risk. Although the models... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Financial Economics. |
| Ano: 2007 |
URL: http://purl.umn.edu/6606 |
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