On the investment sensitivity of debt under uncertainty

Christopher F. Baum; Mustafa Caglayan; Oleksandr Talavera

doi:10.1016/j.econlet.2009.09.015

On the investment sensitivity of debt under uncertainty

Christopher F. Baum, Mustafa Caglayan, Oleksandr Talavera

School of Economics

Research output: Contribution to journal › Article › peer-review

22 Citations (Scopus)

Abstract

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.

Original language	English
Pages (from-to)	25-27
Number of pages	3
Journal	Economic Letters
Volume	106
Issue number	1
DOIs	https://doi.org/10.1016/j.econlet.2009.09.015
Publication status	Published - 2010

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10.1016/j.econlet.2009.09.015

Cite this

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title = "On the investment sensitivity of debt under uncertainty",

abstract = "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.",

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