The joint impact of policy uncertainty and demand uncertainty on firms’ investment decisions and the channels the transmissions: evidence from Italian firms
Grimaldi, Alessandra (A.A. 2022/2023) The joint impact of policy uncertainty and demand uncertainty on firms’ investment decisions and the channels the transmissions: evidence from Italian firms. Tesi di Laurea in Microeconomic analysis, Luiss Guido Carli, relatore Emanuele Tarantino, pp. 37. [Master's Degree Thesis]
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Abstract/Index
The existing empirical literature on the relationship between uncertainty and investment predominantly focuses on individual types of uncertainty, neglecting the interplay between different sources of uncertainty. This study aims to bridge this gap by examining how economic policy uncertainty (macro-uncertainty) and demand uncertainty (micro-uncertainty) interact and jointly affect the investment decisions of a sample of Italian manufacturing firms. Using a newspaper-based measure of economic policy uncertainty and a constructed measure of demand uncertainty based on managers’ expectations of future sales, the study finds that economic policy uncertainty interacted with firm-level uncertainty depresses firms’ investments. By disaggregating economic policy uncertainty into its constituent components, the findings elucidate that the interplay between economic policy uncertainty and demand uncertainty primarily operates through fiscal policy channels. Additionally, this study uncovers significant heterogeneity in the relationship between uncertainty and investment: the negative effect of the interplay of aggregate and firm-level uncertainty is more pronounced for firms that are highly exposed to government, employ less flexible labor input, and have smaller size.
References
Bibliografia: pp. 36-37.
| Thesis Type: | Master's Degree Thesis |
|---|---|
| Institution: | Luiss Guido Carli |
| Degree Program: | Master's Degree Programs > Master's Degree Program in Economics and Finance (LM-56) |
| Chair: | Microeconomic analysis |
| Thesis Supervisor: | Tarantino, Emanuele |
| Thesis Co-Supervisor: | Polo, Andrea |
| Academic Year: | 2022/2023 |
| Session: | Summer |
| Deposited by: | Maria Teresa Nisticò |
| Date Deposited: | 17 Oct 2023 09:27 |
| Last Modified: | 17 Oct 2023 09:27 |
| URI: | https://tesi.luiss.it/id/eprint/36661 |
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