Policy uncertainty and private investment in developing countries

Private Investment and Financial Sector Policies in Developing Countries

This paper examines the role of financial sector policies in determining private investment in the economies of India and Malaysia. The results suggest that the presence of significant directed credit programs favoring certain priority sectors in the economies appear to be harmful for private capital formation in both countries. Interest rate controls seem to have a positive impact on investmen...

Capital inflows and investment in developing countries

Analytical and Regulatory Issues in the Competition for Private Investment Between and Within Developing Countries

Economic policy uncertainty and firm-level investment

This paper examines the effect of economic policy uncertainty and its components on firm-level investment. It is found that economic policy uncertainty in interaction with firm-level uncertainty depresses firms’ investment decisions. When firms are in doubt about costs of doing business due to possible changes in regulation, cost of health care and taxes, they become more guarded with investmen...

Investment under Uncertainty and Policy Change∗

In this paper the impact of a policy change on the investment behavior of the firm is studied in an asymmetric information setting. The policy change occurs when a stochastic process describing the state of the economic environment reaches a certain trigger. Asymmetric information is modeled here by imposing that the firm does not know this trigger but only its probability distribution. Consequ...