Arbeitspapier
Investment and Subjective Uncertainty
A longstanding challenge in evaluating the impact of uncertainty on investment is obtaining measures of managers' subjective uncertainty. We address this challenge by using a detailed new survey measure of subjective uncertainty collected by the U.S. Census Bureau for approximately 25,000 manufacturing plants. We find three key results. First, investment is strongly and robustly negatively associated with higher uncertainty, with a two standard deviation increase in uncertainty associated with about a 6% reduction in investment. Second, uncertainty is also negatively related to employment growth and overall shipments (sales) growth, which highlights the damaging impact of uncertainty on firm growth. Third, flexible inputs like rental capital and temporary workers show a positive relationship to uncertainty, demonstrating that businesses switch from less flexible to more flexible factor inputs at higher levels of uncertainty.
- Sprache
-
Englisch
- Erschienen in
-
Series: IZA Discussion Papers ; No. 15710
- Klassifikation
-
Wirtschaft
Management of Technological Innovation and R&D
Technological Change: Choices and Consequences; Diffusion Processes
- Thema
-
subjective expectations
business-level uncertainty
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Bloom, Nicholas
Davis, Steven J.
Foster, Lucia
Ohlmacher, Scott
Saporta-Eksten, Itay
- Ereignis
-
Veröffentlichung
- (wer)
-
Institute of Labor Economics (IZA)
- (wo)
-
Bonn
- (wann)
-
2022
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Bloom, Nicholas
- Davis, Steven J.
- Foster, Lucia
- Ohlmacher, Scott
- Saporta-Eksten, Itay
- Institute of Labor Economics (IZA)
Entstanden
- 2022
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