Baum, Christopher, Mustafa Caglayan, and Oleksandr Talavera. “Uncertainty Determinants of Firm Investment”. Boston College Working Papers in Economics 646, 2006.
We investigate the impact of measures of uncertainty on firms' capital investment behavior using a panel of U.S. firms. Increases in firm-specific and CAPM-based measures have a significant negative impact on investment spending, while market-based uncertainty has a positive impact.