Irreversible investment under uncertainty: the message in Leasing Expenditures
by Konstantinos Drakos, Eleftherios Goulas
International Journal of Monetary Economics and Finance (IJMEF), Vol. 1, No. 4, 2008

Abstract: In the present study we initially take stock of the dispersed definitions and measurement methods of irreversibility by offering a bird's eye view of the existing literature. Then we construct a closed-form model to investigate the impact of conditional uncertainty on investment spending under irreversibility by employing leasing penetration rates as an indirect indicator for the degree of irreversibility. Our results support the concept that the investment-uncertainty elasticity varies across leasing rates, and that the overall negative effect of uncertainty on investment decreases monotonically with the degree of reversibility.

Online publication date: Thu, 06-Nov-2008

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Monetary Economics and Finance (IJMEF):
Login with your Inderscience username and password:

    Username:        Password:         

Forgotten your password?


Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com