Private Investment, Uncertainty, and Irreversibility in Uganda私人投资，不确定性和不可逆性，乌干达精品.pdfVIP

Private Investment, Uncertainty, and Irreversibility in Uganda Alexander Bilson Darku 2 19-9205 Bayne Street. Ville La Salle. PQ H8R-2H 1 Canada Tel. +(5 14)-367-55 10 (residence) Email: adarku@po-box.mcgill.ca November 2000 Abstract The paper uses panel data on Ugandan firms and a measure of idiosyncratic uncertainty to determine the nature of investment sensitivity to changes in perceived uncertainty among firms with different degrees of investment reversibility. Using a sample selection technique to fit a modified version of an accelerator model, the paper yielded results consistent with predictions of theories of irreversible investment. The results indicate a negative relationship between uncertainty and investment. Findings also indicate that uncertainty has a greater negative effect on investment for firms with less reversible investment. . i 1. Introduction The importance of investment behavior of firms to economic growth cannot be overemphasized. However, economic literature has not been able to offer a clear explanation of why some countries invest more than others, or why within a particular country some industries invest more than others. Recognizing that there is little empirical evidence of the impact of uncertainty and irreversibility in investment decisions, this study attempts to investigate the nature of the relationship between investment, uncertainty, and irreversibility in Uganda. The study hypothe