Economics, Econometrics and Finance
8 years ago

Unlocking Investment Potential: Overcoming Market Imperfections and Uncertainty

Investment, Capital Market Imperfections, and Uncertainty: Theory and Empirical Results
Robert Lensink, Hong Bo, Elmer Sterken

Paper Summary

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The article explores how imperfections in capital markets and uncertainty affect investment decisions. It discusses different theories and models to understand these relationships, such as the importance of internal funds and the option approach to investment under uncertainty. The researchers analyze empirical evidence to show how uncertainty impacts investment behavior. Key findings include the significance of internal funds in investment decisions and the different effects of uncertainty on investment.