What is the Investment Loss due to Uncertainty?

Theodore Panagiotidis and Panagiotis Printzis

No 383, Working Papers from Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies)

Abstract: We investigate the effect of uncertainty on investment. We employ a unique dataset of 25000 Greek firms’ balance sheets for 14 years covering the period before and after the eurozone crisis. A dynamic factor model is employed to proxy uncertainty. The investment performance of 14 sectors is examined within a dynamic investment model. Robust GMM estimates of the investment rate model reveal a high degree of heterogeneity among these sectors. Overall uncertainty affects negatively investment performance and this effect substantially increased in the years of crisis. Agriculture and Mining are the least affected and the most affected ones include Manufacturing, Real Estate and Hotels. Focusing on the response of investment to uncertainty, it emerges that (relative) smaller firms are affected more compared to larger ones.

Keywords: Greek firms; Uncertainty; Volatility; GMM; Panel data (search for similar items in EconPapers)
JEL-codes: C23 D22 D81 D92 G31 (search for similar items in EconPapers)
Pages: 59
Date: 2019-08
New Economics Papers: this item is included in nep-cfn
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://www.dokumente.ios-regensburg.de/publikationen/wp/wp_383.pdf (application/pdf)

Related works:
Journal Article: What is the investment loss due to uncertainty? (2020)
Working Paper: What is the investment loss due to uncertainty? (2019)
Working Paper: What is the Investment Loss due to Uncertainty? (2019)
Working Paper: What is the Investment Loss due to Uncertainty? (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ost:wpaper:383

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Papers from Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies) Contact information at EDIRC.
Bibliographic data for series maintained by Kseniia Gatskova ( this e-mail address is bad, please contact ).