Economic policy uncertainty and firm-level investment

The Effect Of Salvage Market On Strategic Technology Choice And Capacity Investment Decision Of Firm Under Demand Uncertainty

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...

Wait-and-See: Investment Options under Policy Uncertainty

This paper develops a model of investment decisions in which uncertainty about a one-time change in tax policy induces the firm to temporarily stop investing–to adopt a wait-and-see policy. After the uncertainty is resolved, the firm exploits the tabled projects, generating a temporary investment boom.

Green Electricity Investments: Environmental Target and the Optimal Subsidy∗

We investigate the optimal investment decision in renewables under market demand uncertainty, in the context of the Italian strategy for renewable deployment under the EU policy. Upon investing, the firm has to decide about the time and size of the investment. We find that a higher subsidy level induces the firm to invest earlier with a smaller investment capacity. This implies that a given env...

Policy Uncertainty and Technological Innovation ^ ' ^ ALFRED

Without certainty about government policies, business decision makers are unable to assess risk and opportunity and make the trade-offs necessary for investment in new technologies. Different policies (R&D, health and safety, economic regulation) have different effects, depending on type of industry and size of firm. Because there are no established standards for judging industry performance, i...