INCOME UNCERTAINTY,CONSUMER DURABLES INVESTMENTS,AND HOME PRODUCTION: EVIDENCE FROM CHINA

We investigate the effect of uncertainty on home durable purchase decisions, and empirically evaluate the efficacy of consumer durable policies under uncertainty. A model of lumpy home capital adjustment shows that elevated uncertainty leads households to adopt a cautionary perspective and postpone their capital adjustment. We test this prediction using microevidence from China where both uncertainty and home production are substantial. We exploit a wide‐scale rebate program funded by the Chinese government as a natural experiment, and examine the impact on household investment. We find strong, significant, and robust evidence that greater income uncertainty inhibits durable adjustment. Our findings highlight the impediment that income uncertainty poses to investment in home durables, which are often considered as “engines of liberation” in emerging economies. (JEL E21, E64, J22, O16, O23, D91)     

不确定性条件下资本市场投资预期收益模型探析

在现实经济活动中特别是在资本市场投资中,人们对将来的情况很难准确地预测到,他们所知道的最多只不过是在未来各种各样的收益状况下所可能产生的结果.也就是说,未来经济活动特别是资本市场投资活动具有不确定性.由于不确定性的预期的作用和影响,在不确定性条件下的资本市场投资预期收益模型与在确定性条件下的收益模型存在着一定的偏差.只有减少人们对经济不确定性的预期,才能使资本市场投资需求旺盛.     

Random capital service in labor-managed and profit-maximizing firms

The labor-managed firm and the profit-maximizing firm may experience random production due to a variety of fundamental sources of uncertainty. This paper demonstrates that the nature of the source of uncertainty leads to alternative specifications of the problem and to different conclusions. The specific source of uncertainty modeled in this presentation is random capital failure in the labor-managed firm and in the profit-maximizing firm. In each case, the choice of primary capital, reserve capital, and labor is considered.     

股权性质、环境不确定性与技术资本配置效率

技术转化为资本，资本创造价值已经成为共识，技术资本在不同公司创造价值的作用程度不同，根源是技术资本配置效率问题。选取沪深两市2008-2013年间制造业上市公司为样本，检验了基于不同股权性质的公司环境不确定性对企业技术资本配置效率和价值的影响，研究结果表明：①企业环境不确定性程度越高，技术资本配置效率越低，并且技术资本配置偏离度在国有公司中表现为配置过度，在非国有公司表现为配置不足；②在股权性质为国有的公司中，由环境不确定性引发的技术资本配置偏离将降低企业价值，在非国有控股公司中，由环境不确定性导致的技术资本配置偏离将增加企业价值。     

Short- and long-run heterogeneous investment dynamics

In this paper, we model the dynamics of business investment taking into account asset-specific characteristics potentially affecting the reactivity of aggregate and disaggregate capital accumulation over the business cycle. We estimate Information and Communication Technologies (ICTs) and traditional investment (non-ICT) determinants within a Vector Error Correction Model testing the assumptions of the flexible accelerator and neoclassical model as well as the role of financial constraints and uncertainty. We evaluate our model on Italian data over the period 1980–2012, and we check our results also with Spanish and UK data. Our findings support the assumption that capital is heterogeneous since short- and long-run determinants are significantly different across the assets. Traditional assets experience stock adjustment costs while ICT investment incurs flow adjustment cost. In the short run, liquidity is a key determinant of investment independently of the asset type. In the long run, uncertainty significantly affects ICT. Finally, the results of the counterfactual exercises support the idea that ICT is a key policy variable to foster economic growth.     

REDISTRIBUTION AND FISCAL UNCERTAINTY SHOCKS

This article studies the impact of fiscal uncertainty shocks. In micro data, noncapital holders reduce consumption persistently in response to an increase in fiscal uncertainty whereas capital holders do not. Motivated by this evidence, I introduce limited capital market participation and show that it magnifies the fall in economic activity due to a fiscal uncertainty shock and induces macroeconomic comovement. This is because the limited participation model captures individual uncertainty about redistribution. When agents are ambiguity averse, this uncertainty about redistribution has first-order effects. As a result, the model successfully matches the empirical responses of macro and household variables.     

The effects of environmental policies on the abatement investment decisions of a green firm

This paper focuses on environmental policies aimed at rising investment in pollution abatement capital. We assume that ecological uncertainty, i.e., uncertainty over the dynamics of pollution, affects firm investment decisions. Capital irreversibility is not postulated but endogenized using a quadratic adjustment cost function. Using this framework, we study the effects of environmental policies considering taxes on polluting inputs and subsidies to reduce the cost of abatement capital. Environmental policies promoted to enforce abatement capital may generate the unexpected result of reducing the abatement investment rate.     

Pursuing the wrong options? Adjustment costs and the relationship between uncertainty and capital accumulation

Abel and Eberly (1999) prove that uncertainty has an ambiguous effect on long run capital accumulation in a real options model. We show that, with adjustment costs quadratic in investment, more uncertainty reduces capital and this effect may be large.     

On the investment sensitivity of debt under uncertainty

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

Intertemporal Emission Permits Trading Under Uncertainty and Irreversibility

This paper analyzes the effect of emission permit banking on clean technology investment and abatement under conditions where the stringency of the future cap is uncertain. We examine the problem of heterogeneous firms minimizing the cost of intertemporal emission control in the presence of stochastic future pollution standards and emission permits that are tradable across firms and through time. A firm can invest in clean capital (an improved pollution abatement technology) to reduce its abatement cost. We consider two possibilities: that investment is reversible or irreversible. Uncertainty is captured within a two period model: only the current period cap is known. We show that if banking is positive and marginal abatement costs are sufficiently convex, there will be more abatement and investment in clean technology under uncertainty than there would be under certainty and no banking. These results are at odds with the common belief that uncertainty on future environmental policy is a barrier to investment in clean capital. Moreover, under uncertainty and irreversibility, we find that there are cases where banking enables firms to invest more in clean capital.     

TECHNOLOGICAL CHANGE,HUMAN CAPITAL STRUCTURE,AND MULTIPLE GROWTH PATHS*

This paper presents a theoretical model to analyze the effects of technology change on growth rates of income and human capital in the uncertain environments of technology. The uncertainty comes from two sources: the possibility of a technology advance and the characteristics of new technologies. We set up an overlapping generations model in which young agents invest in both width and depth of human capital in order to adopt new technologies. The model develops explicitly the micro‐mechanism of the role of human capital in adopting new technologies as well as that of the process of human capital production in the uncertain environments. In our model, a higher level of width of human capital relative to the level of depth leads one country to a higher growth path. We also show that an economy can have different growth paths depending on the initial structure of human capital and the uncertainty about the nature of new technologies. In particular, new technologies with more uncertain characteristics may adversely affect human capital accumulation and income growth, leading the economy to a low growth trap.     

Uncertainty and Investment: Some Evidence from the Panel Data of Japanese Manufacturing Firms

We analyse empirically the effect of uncertainty on fixed investment based on a panel data set of Japanese manufacturing firms. The uncertainty measure, represented by the conditional standard deviation of the sales growth rate, is constructed by employing three different statistical models. We also decompose the demand uncertainty into aggregate, industry-wide, and firm-specific forms of uncertainty. We find that uncertainty, in particular aggregate and industry-wide uncertainty, exerts a significantly negative effect on investment irrespective of the statistical methods chosen. We also find that this negative relationship between investment and uncertainty is closely related to the degree of irreversibility of capital.
JEL Classification Number: D92.     

Trade Policy Transparency and Investor Confidence: Some Implications for an Effective Trade Policy Review Mechanism

This paper is concerned with the value of the WTO's Trade Policy Review Mechanism, particularly its transparency role and its potential role in policy stability, for investor confidence in developing countries. The implications of reduced risk and uncertainty regarding trade policy for investor confidence, and ultimately for the capital stock and the long-run structure of production, are examined in an analytical model. Certainty equivalence is employed to assess the general equilibrium effects of risk and uncertainty. Their reduction can boost risk-adjusted returns, leading to an increase in long-run levels of capital.     

Investment with Uncertain Tax Policy: Does Random Tax Policy Discourage Investment

We consider the impact of tax policy uncertainty on firm level and aggregate investment, comparing investment behaviour when uncertainty is due to a shock following Geometric Brownian Motion (GBM) versus when random discrete jumps in tax policy occur. Expectations of the likelihood of a tax policy switch have an important negative impact on the gain to delaying investment in the latter model and time to investment can fall with increasing tax policy uncertainty. Aggregate investment simulations indicate that capital formation is adversely affected by increases in uncertainty in the traditional GBM model but can be enhanced in the jump process model.     

任务不确定性、工作控制与内部创业行为关系研究——工作繁荣的中介效应和心理资本的调节效应

员工内部创业行为是成就和保持公司创业的基础。基于工作要求-资源理论,构建以工作繁荣为中介变量、心理资本为调节变量的任务不确定性、工作控制与员工内部创业行为关系模型。实证研究结果表明：任务不确定性、工作控制对员工内部创业行为有显著正向影响;工作繁荣在工作控制与员工内部创业行为之间起部分中介作用;心理资本对工作控制与员工内部创业行为间关系有正向调节效应,员工心理资本水平越高,工作控制对其内部创业行为直接影响越大。这对企业正确认识任务不确定性、工作控制对员工心理和工作行为的影响,有效利用这两个工作特征因素促进员工内部创业具有重要指导意义。     

Determinants of investment and innovation expenditure in Polish manufacturing industries

This article analyses determinants of sectoral R&D and innovation expenditure as well as investment in Polish manufacturing industries in 1994–2004. The estimated coefficients for user cost of capital are generally in line with the neoclassical model of investment, except for R&D intensity. The latter are primarily discouraged by systemic uncertainty. The rate of growth of sales is not a prominent determinant of investment and innovation expenditure. Market concentration coupled with uncertainty has a damaging effect on physical capital investment but it promotes R&D expenditure and leaves innovation intensity unaltered.     

Managerial flexibility, uncertainty, and corporate investment: The real options effect

This paper examines how changes in uncertainty affect corporate investment and how managerial flexibility influences this effect. Consistent with existing evidence, this study shows that increased uncertainty reduces a firm's capital expenditures even after controlling for investment opportunities and fund availability. It further shows that the negative effect of increased uncertainty on corporate investment is more pronounced for firms with fewer financial constraints and larger size. Overall, the results suggest that managerial flexibility proxied by certain firm characteristics affects the negative relation between uncertainty and investment.     

The Legislator as Political Entrepreneur: Investment in Political Capital

This paper applies the standard Austrian theory of capital investment to the standard interest group model of legislator behavior. Distinguishing between reputational capital and representative capital as interdependent forms of political capital, I argue that legislator behavior (specifically roll call voting) can be explained as entrepreneurial investment in political capital under uncertainty. I discuss several examples in which this approach can potentially add predictive power regarding legislative voting.     

Import-Price Uncertainty, Production Decisions, and Relative Factor Shares

The effects of import-price uncertainty on factor income in Switzerland are estimated. The production-theory approach is used to derive the import demand function from an expected utility maximization problem, treating imports as an input to the technology. The model is also used to test for risk aversion and to assess the impact of uncertainty on the volume of imports and gross output. Evidence is found that, for most years, labor has been relatively more vulnerable to uncertainty than has capital.