Allocation effects of uncertainty on resources in Japan

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    This paper provides evidence of a negative association between macroeconomic uncertainty and the cross sectional dispersion of investment rate for a panel of Japanese manufacturing firms. We show that an increase in uncertainty leads to the narrowing of the cross section dispersion of investment rate and vice versa. This finding suggests that firms' fixed capital investment behavior becomes more homogenous in times of increased uncertainty.
    Original languageEnglish
    Pages (from-to)23-26
    Number of pages4
    JournalEconomics Letters
    Issue number1
    Early online date1 Nov 2013
    Publication statusPublished - Jan 2014

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