On the Investment Sensitivity of Debt under Uncertainty

Baum, Christopher, Mustafa Caglayan, and Oleksandr Talavera. “On the Investment Sensitivity of Debt under Uncertainty”. Boston College Working Papers in Economics 686, 2008.
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Abstract

We investigate the impact of debt on a panel of U.S. manufacturing firms' capital investment behavior as the underlying firm-specific and macroeconomic uncertainty changes. Our estimates show that the influence of leverage on capital investment may be stimulating or mitigating depending on the effects of uncertainty.

Title
On the Investment Sensitivity of Debt under Uncertainty
Author
Baum, Christopher
Caglayan, Mustafa
Talavera, Oleksandr
School
Arts and Sciences
Discipline
Economics
Genre
working paper
Date Issued
2008
Series Title
Boston College Working Papers in Economics
Series Number
686
General Note
Originally posted on: http://ideas.repec.org/p/boc/bocoec/686.html
Subject
Capital; Investment; Capacity
Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
Criteria for Decision-Making under Risk and Uncertainty
capital investment
leverage
uncertainty

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