Mellati, Ali (2008): Uncertainty and investment in private sector: An analytical argument and a review of the economy of Iran.
Download (1216Kb) | Preview
The initial theories of investment have emphasized the role of reduction of interest rate and increase in output for encouraging private investment. But there are ample grounds for doubting these theories. As a result, researchers have recently emphasized the importance of uncertainty in determining the private rate of investment. As different theories give various results with respect to their assumptions, a new theory of investment under uncertainty is explained in this study. Intuition is that investors use the best worst strategy instead of maximization of expected returns in an uncertain environment. There must be a time horizon within which entrepreneurs can rely on information and assess their projects. This time horizon is compared with adjusted payback period of projects. Projects with longer adjusted payback period will be rejected. Among the viable projects, a project with shorter adjusted payback period is preferable. The more is the uncertainty about the future, the shorter the horizon within which information can be trusted. Twenty-three factors relating to uncertainty are classified into three different categories: changes in policies and macroeconomic outcomes, the quality of public governance and socio- political institutions and conflicts. A panel data method is applied to examine the effect of these factors on the private investment rate. Among the macroeconomic factors, uncertainty relating to exchange rate distortion, terms of trade, growth and trade have significant negative effect on the private investment rate. The effect of other factors (i.e. uncertainty about credit to private sector, inflation and real interest rate) on the rate of private investment is insignificant. Among the socio-political institutions and conflict factors the negative effect of civil war, purges, coups and constitutional changes cannot be rejected. There is not enough evidence that other measures of socio-political uncertainty (i.e. democracy, revolutions, inequality, assassinations, strikes and riots) have a significant impact on the private investment rate. However I cannot reject the positive effect of war on the private investment rate. Among the indices of the quality of public governance, there is not enough evidence to reject the hypothesis that worsening condition of regulatory burden, rule of law and property rights will reduce the private investment rate. However, the hypothesis of negative effect of government contribution in economy on the private investment rate can be rejected. Surprisingly, the effect of control of corruption on the private investment rate is quite negative and significant.
|Item Type:||MPRA Paper|
|Original Title:||Uncertainty and investment in private sector: An analytical argument and a review of the economy of Iran|
|Keywords:||Investment, Private Sector, Uncertainty, Panel Data|
|Subjects:||D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty
O - Economic Development, Technological Change, and Growth > O5 - Economywide Country Studies
C - Mathematical and Quantitative Methods > C2 - Single Equation Models; Single Variables > C23 - Models with Panel Data; Longitudinal Data; Spatial Time Series
E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E22 - Capital; Investment; Capacity
|Depositing User:||Ali Mellati|
|Date Deposited:||14. Nov 2010 18:36|
|Last Modified:||14. Feb 2013 07:22|
Abel, Andrew B. and Janice C. Eberly, 1994, “A Unified Model of Investment Under Uncertainty.” The American Economic Review, 84(5):1369-1384.
Abel, Andrew B. and Janice C. Eberly, 1995, “The effect of Irreversibility and Uncertainty on Capital Accumulation.”, NBER working paper, No.5363, Advised 1998.
Abel, Andrew B. and Janice C. Eberly, 1996, “Optimal Investment With Costly Reversibility.” The Review of Economic Studies, 63(4): 581-593.
Abel, Andrew B., 1983, “Optimal Investment Under Uncertainty.” The American Economic Review, 73(1): 228-233.
Abel, Stephen L., 1980, “Inflation Uncertainty, Investment Spending and Fiscal Policy.” Federal Reserve Bank of Kansas City.
Adersa, Alicia and Carles Boix and Mark Payne, 2003, “Are You Being Served? Political Accountability and Quality of Government”, The Journal of Law, Economics and Organization, 19(2).
Aizenman, Joshua and Nancy Marion, 1996, “Volatility and the Investment Response.” NBER Working Paper, No.5841, November.
Alesina, Alberto and Silvia Ardagna and Giuseppe Nicoletti and Fabio Schiantarelli, 2003, “Regulation and Investment”, NBER Working Paper, No.9560.
Alesina, Alberto and Sule Ozler and Nouriel Roubini and Philip Swagel, 1992, “Political Instability and Economic Growth”, NBER Working Paper No.4173.
Amable, Bruno & Lilas Demmou & Donatella Gatti, 2006, “Institutions, Unemployment and Inactivity in the OECD Countries.”Paris-Jordan Science Economiques (PSE), Ecole Normale Superieure Working paper No.2006-16.
Arestis, Philip, 1996, “Post-Keynesian economics: Towards Coherence.”,Cambridge Journal of Economics,20:111-135.
Arrow, Kenneth J., 1968, “Optimal Capital Policy with Irreversible Investment.” In J.N.Wolfe, ed., Value, Capital and Growth. Papers in Honour of Sir John Hicks, Edinburgh: Edinburgh University Press.
Asteriou, Dimitrios and Simon Price, 2005, “Uncertainty, Investment and Economic Growth: Evidence From a Dynamic Panel.” Review of Development Economics, 9(2):277-288.
Baltagi, Badi H., 2005, “Econometric Analysis of Panel Data.” John Wiley & Sons, Third Edition, England.
Bar-Ilan, Amer and William C. Strange, 1996, “Investment Lags”, The American Economic Review, 86(3): 610-622.
Barro, Robert J., 1999, “Inequality, Growth and Investment”, NBER Working Paper, No.7038.
Baum, Christopher F., 2006, “Advanced Econometrics, Chapter 14: Advanced Panel data methods.” Downloadable from: http://fmwww.bc.edu/ec-c/s2006/327/EC327.s2006.nn3.pdf .
Bayley, David H., 1966, “The effect of Corruption in a Developing Model Nation.” The Western Political Quarterly, 19(4):719-732.
Beach,William A. & Marc A. Miles,2006, “Explaining the Factors of the Index of Economic Freedom.” From chapter 5 of 2006 Index of Economic Freedom. The Heritage Foundation.
Beck, Nathaniel & Jonathan N. Katz, 1995, “What to do (and Not To Do) With Time-Series Cross-Section Data.” The American Political Science Review, 89(3): 634-647.
Beck, Nathaniel & Jonathan N. Katz, 1996, “Nuisance Vs. Substance: specifying and Estimating Time-Series Cross-Section Models.” Political Analysis, 6(1): 1-36.
Beck, Nathaniel & Jonathan N. Katz, 2004, “Time-Series Cross-Section Issues: Dynamics.” Downloadable from: http://polmeth.wustl.edu/retrieve.php?id=36 .
Beck, Nathaniel, 2001, “Time-Series Cross Section Data: What Have We Learned in The Past Few Years?” Annual Review Political Science, 4:271-293.
Beck, Nathaniel, 2004, “Longitudinal (Panel and Time-Series Cross-Section) Data.” Downloadable from: http://weber.ucsd.edu/~tkousser/Beck%20Notes/longitude2004/short.pdf .
Beck, Nathaniel, 2006, “Time-Series Cross-Section Methods.” Forthcoming, Oxford Handbook of Political Methodology.
Berg, Sanford V., 2001, “ Infrastructure Regulation: Risk, Return, And Performance”, Global Utilities 1(May): 3-10.
Besley, Timothy, 1995, “Property Rights and Investment Incentives: Theory and Evidence from Ghana”, The Journal of Political Economy, 103(5): 903-937.
Bigsten, Arne and Paul Collier and Stefan Dercon and et al, 1999, “Contract Flexibility and Dispute Resolution in African Manufacturing”, Center for the Study of African Economies Working Paper Series No.99-20.
Bo, Hong, 1999, “ The Q Theory of Investment: Does Uncertainty Matter?”, University of Groningen, Research Report No.99E07.
Bolaky, Bineswaree and Caroline Freund, 2004, “Trade, Regulation and Growth”, World Bank, WPS.3255.
Bovens, Mark, 2005, “Public Accountability”, The Oxford Handbook of Public Management.
Broadman, Harry G. and James Anderson, 2004, “Institutional Aspects of The South Eastern European Economy: Introduction, Trends and Scope of the Study”, World Bank, First Section Of Building Market Institutions in South East Europe.
Brunetti,Aymo & Beatrice Weder,1997, “ Investment and Institutional Uncertainty: A Comparative Study of Different Measures.”,The World Bank,Technical Paper No.4.
Byrne, Joseph P. and E. Philip Davis, 2004, “ Permanent and Temporary inflation Uncertainty and Investment in the United States.” Economics Letters, 85:271-277.
Byrne, Joseph P. and E. Philip Davis, 2005, “The Impact of Short and Long Run Exchange Rate Uncertainty on Investment: A Panel Study of Industrial Countries”, Oxford Bulletin of Economics and Statastics, 67(3).
Caballero, Ricardo J., 1991, “ On The Sign of Investment-Uncertainty Relationship.” The American Economic Review, 81(1):279-288.
Cardoso, Eliana, 1993, “Private Investment in Latin America”, Economic Development and Cultural Change, 41(4):833-848.
Carlsson, Mikael, 2004, “Investment and Uncertainty: A Theory- Based Empirical Approach.” Uppsala University Working Paper, No.17, Sweden.
Carmignani, Fabrizio, 2001, “Political Instability, Uncertainty and Economics”, Journal of Economic Surveys,17(1).
Cecchetti, Stephen G., 1993, “Comment on Inflation Uncertainty, Relative Price Uncertainty, and Investment in U.S. Manufacturing.” Journal of Money, Credit and Banking, 25(3):550-557.
Chen, Xiujian and Shu Lin and W. Robert Reed, 2005, “Another Look At What to Do Whit Time-Series Cross-Section Data.” Paper Provided by EconWPA in its Series Econometrics with No. 0506004.
Claessens, Stijn and Luc Laeven, 2003, “Financial Development, Property Rights and Growth”, The Journal of Finance, Vol. LVIII, No.6.
Cottani, Joaquin A. and Domingo F. Cavallo and M. Shahbazkhan, 1990, “Real Exchange Rate Behavior and Economic Performance in LDCs”, Economic Development and Cultural Change, 39(1):61-67.
Craine, Roger, 1989, “Risky Business the Allocation of Capital.” Journal of Monetary Economics, 23: 201-218.
Darby, Julia and Andrew Hughes Hallett and Jonathan Ireland and Laura Piscitelli, 1999, “The Impact of Exchange Rate Uncertainty on The Level of Investment”, The Economic Journal, 109:55-67.
Darku, Alexander Bilson, 2001, “Private Investment Uncertainty and Irreversibility in Uganda” African Finance Journal, 3(1): 1-25.
Davidson, Paul, 1991, “Is Probability Theory Relevant for Uncertainty? A Keynesian Perspective.” The Journal of Economic Prespective,5(1):129-143.
Davis, Kevin E., 2004, “What Can The Rule of Law Variable Tell Us About Rule of Law Reforms?”, New York University, Law and Economics Research Paper No.04-026.
Dehn, Jan, 2000, “Private Investment in Developing Countries: The Effect of Commodity Shocks and Uncertainty.” Center for the Study of African Economies Working Paper Series, No.WPS/2000/11.
Demombynes, Gabriel and Berk Ozler, 2002, “Crime and Local Inequality in South Africa”, World Bank Working Paper No.2925.
Dixit, Avinash,K. and Robert S. Pindyck,1994, “Investment under uncertainty ” . Princeton:Princeton university press.
Djankov, Simeon and Rafael la porta and Florencio Lopez-de-Silanes and Andrei Shleifer, 2002, “Courts: The Lex Mundi Projects”, NBER Working Paper No.8890.
Do, Quy-Toam and Lakshmi Lyer, 2003, “Land Rights and Economic Development: Evidence from Vietnam”, World Bank, Policy Research Working Paper No.3120.
Doig, Alan and Stephen Riley, “Corruption and Anti-Corruption Strategies: Issues and Case Studies From Developing Countries”, Corruption and integrity Improvement Initiatives in Developing Countries, Chapter 3.
Dollar, David and Mary Hallward-Driemeir and Taye Mengistae, 2003, “Investment Climate and Firm Performance in Developing Economies”, World Bank, Development Research Group.
Dollar, David, 1992, “Outward-Oriented Developing Economics Really Do Grow More Rapidly: Evidence From 95 LDCs, 1976-1985”, Economic Development and Cultural Change, 40(3):523-544.
Drukker, D.M., 2003, “Testing for Serial Correlation in Linear Panel-Data Models.” STATA Journal (3)2: 168-177.
Dulles, Eleanor, 1942, “War and Investment Opportunities: An Historical Analysis”, The American Economic Review, 32(1), part 2:112-128.
Easterly, William and Michael Kermer and Lant Pritchett and Lawrence H. Summers, 1993, “Good Policy or Good Luck? Country Growth Performance and Temporary Shocks”, NBER, Working Paper, No.4474.
Easterly, William R., 2001, “The Lost Decades: Developing Countries’ Stagnation in Spite of Policy Reform 1980-1998 Dataset.” The World Bank.
Edmiston, Kelly D.,2004, “Tax Uncertainty and Investment: A Cross-Country Empirical Examination.” Economic Inquiry, 42(3):425-440.
Eisner, Robert and Robert H. Strotz, 1963, “The Determinants of Business Investment.” In Commission on Money and Credit, Impacts of Monetary Policy. Englewood Cliffs, NJ: Prentice Hall.S.
Evenett, Simon J., 2003, “Competition Law and The Investment Climate In Developing Countries”, A Contribution to World Development Report 2005 on Investment Climate, Growth and Poverty.
Everhart, Stephen S. and Mariusz A. Sumlinski, 2001, “Trends in Private Investment in Developing Countries, Statistics For 1970-2000”, IFC, Discussion Paper, No.44.
Fafchamps, Marcel and Bart Minten, 2001, “Property Rights in a Flea Market Economy”, Economic Development and Cultural Change, 49(2): 229-267.
Farmer, R., 2007, “Animal Spirits”, entry in The New Palgrave Dictionary of Economics, 2nd ed., ed. L. Blume and S. Durlauf, Palgrave Macmillan(Forthcoming).
Fedderke, Johannes, 2004, “Investment in Fixed Capital Stock: Testing For the Impact of Sectoral and Systemic Uncertainty”, Oxford Bulletin of Economics and Statistics, 66(2).
Feng, Yi, 2001, “Political Freedom, Political Instability, And Policy Uncertainty: A Study of Political Institutions and Private Investment in Developing Countries”, International Studies Quarterly, 45:271-294.
Ferrarini, Benno, 2003, “A Multilateral Framework For Investment”, The Singapor Issues and The World Trading System: The Road to Cancun and Beyond, Chapter I.
Fielding, David, 2003, “Modeling Political Instability and Economic Performance: Israeli Investment During Intifada”, Economica, 70:159-186.
Fink, Carsten and Keith E. Maskus, 2005, “Intellectual Property and Development: Lessons From Recent Economic Research”, World Bank.
Fox, Jonathan, 2000, “Civil Society and Political Accountability: Propositions For Discussion”, Presented at: Institutions, Accountability and Democratic Gov in Latin America, University of Notre Dame.
Frye, Timothy and Ekaterina Zhuravskaya, 2000, “Rockets, Regulatin and the Rule of Law”, Journal of Law, Economics and Organization.
Fuss, Catherine and Philip Vermeulen, 2004, “Firm’s Investment Decisions in Response to Demand and Private Price Uncertainty.” European Central Bank , Working Paper Series, No.347.
Galbraith, James K. and Hyunsub Kum, 2004, “Estimating The Inequality of Household Incomes: A Statistical Approach to the Creation of a Texas Inequality Project.” The University of Texas Inequality Project.
Gaskari, Reihaneh and Hasanali Ganbari and Alireza Eghbali, 2004, “Macroeconomic Uncertainties and Private investment in Iran.” Pazhouheshhai e Eghtesadi, 113-131.
Gelb, Stephan, 2001, “ Socio- Political risk, Confidence and Firm Investment in South Africa.” Paper for the CSAE/UNIDO Workshop on “New Industrial Realities and Firm Behavior in Africa” Oxford.
Gleditsch, Kristian S., 2004, “A Revised List of Wars Between and Within Independent States,1816-2002.”, International Interactions,Vol.30:231-262.
Goodin, Robert E., 2004, “Democratic Accountability: The Third Sector and All”, Seminar Series on: Institutional Analysis of Law, Politics and Society, Baldy center for Law and Social Policy, SUNY Buffalo Law School.
Gray, Cheryl W. and Daniel Kaufmann, 1998, “ Corruption and Development”, Finance and Development, 35(1): 7-10. Greene, 2000, “econometric Analysis.” New York: Prentice-Hall.
Greene, 2003, “econometric Analysis.” New York: Prentice-Hall.
Guasch, J. Luis and Robert W. Hahn, 1997, “The Costs and Benefits of Regulation: Some Implications For Developing Countries”, Background Paper for the World Bank, World Bank Development Report.
Hadi, Ali S.,1992, “Identifying Multiple Outliers in Multivariate Data.” Journal of The Royal Statistical Society, Series B, 54(3): 761-771.
Hadi, Ali S.,1994, “A Modification of a Method for the detection of Outliers in Multivariate Samples.” Journal of The Royal Statistical Society, Series B, 56(2): 393-396.
Hage, F.M., 2003, “Determinations of Government size: The Capacity for Partizan Policy Under Political Constraints.” Diplomarbeit, Konstanz University, downloadable from: http://www.ub.unikonstanz.de/kops/volltexte/2003/1049 .
Hahn, F.H., 1947, “A Note on Profit and Uncertainty.” Economica, New Series, 14(55):211-225.
Hail, Luzi and Christian Leuz, 2004, “International Difference in the Cost of Equity Capital: Do Legal Institutions and Securities Regulation Matter?”, European Corporate Governance Institute Working Paper No.15/2003.
Hallward_Driemeier and David Stewart, 2004, “How Do Investment Climate Conditions Vary Across Countries, Regions and Types of Firms?”, Background Paper Prepared for The World Development Report 2005: A Better Investment Climate for Everyone.
Hartman, Richard, 1972, “The effects of Price and Cost Uncertainty on Investment.” Journal of Economic Theory, 5:258-266.
Hartman, Richard, 1973, “ Adjustment costs, Price and Wage Uncertainty, and Investment.” The Review of Economic Studies, 40(2):259-267.
Heinsz, Witold J.,2000, “The Institutional Environment for Economic Growth”, Economics and Politics, 12(1): 1-31.
Hellman, Joel and Daniel Kaufmann, 2003, “The Inequality of Influence”, Draft for Presentation of Stanford Corruption Workshop.
Heston, Alan & Robert Summers and Bettina Aten, 2002, “Penn World Table Version 6.1”, Center for International Comparisons at the University of Pennsylvania (CICUP).
Hoft, Karla, 2003, “Paths of Institutional Development: A View From Economic History”, World Bank Research Observer, 18(2): 205-226.
Hsiao, Cheng, 1986, “Analysis of Panel Data”, Cambridge University Press.
Huizinga, John, 1993, “Inflation Uncertainty, Relative Price Uncertainty, and Investment in U.S. Manufacturing.” Journal of Money, Credit and Banking, 25(3):521-549.
Iyigun, Murat and Dani Rodrik, 2004, “No the efficiency of Reforms: Policy Tinkering, Institutional Change and Entrepreneurship”, NBER Working Paper, No.10455.
Jamison, Mark A. and Lynne Holt and Sanford V. Berg, 2005, “Measuring and Mitigating Regulatory Risk in Private Infrastructure Investment”, Electricity Journal, 8(6).
Jeong, Byeongju, 2002, “Policy Uncertainty and Long Run Invesment and Output Across Countries”, International Economic Review, 43(2).
Johnson, Simon and Daniel Kaufman, 2001, “Institutions and the Underground Economy”, World Bank, A Decade of Transition: Achievements and Challenges.
Johnson, Simon and John McMillan and Christopher M. Woodruff, 2002a, “Courts and Relational Contracts”, Stanford Law School, John Molin Program in Law and Economics Working Paper No.227.
Johnson, Simon and John McMillan and Christopher M. Woodruff, 2002b, “Property Rights and Finance”, NBER Working Paper No.8852.
Jorgenson, D.W. and Calvin D. Siebert, 1968a, “ A Comparison of Alternative Theories of Corporate Investment Behavior.” The American Economic Review, 58(4):681-712.
Jorgenson, D.W. and Calvin D. Siebert, 1968b, “Optimal Capital Accumulation and corporate Investment Behavior.” The Journal of Political Economy, 76(6):1123-1151.
Jorgenson, D.W., 1963, “Capital Theory and Investment Behavior.” The American Economic Review, 53(2):247-259.
Kaufmann, Daniel and Pedro Civicente, 2005, “Legal Corruption”, downloadable from: http://www.worldbank.org/wbi/governance/pdf/Legal_Corruption.pdf .
Kaufmann, Kraay A.& M. Mastruzzi, 2005, “Governance Matters IV: Governance Indicators for 4996-2004.” The World Bank.
Keefer, Philip, 2004, “A Review of The Political Economy of Governance: From Property Rights to Voice”, World Bank, Policy Research Working Paper Series No.3315.
Keynes, John Maynard, 1936, “The General Theory of Employment, Interest and Money.” The Royal Economic Society, Great Britain.
Kezdi, Gabor, 2003, “Robust Standard Error Estimation In Fixed Effects Panel Models.” Paper Provided by EconWPA in its Series Econometrics with No. 0508018.
Khwaja, Asim Ijaz and Atif Mian, 2004, “Corruption and Politicians: Rent Seeking in an Emerging Financial Market”, downloadable from: http://www.cid.harvard.edu/bread/papers/2004.09_Conference/MianKhwaja_PoliticalLending.pdf .
Klapper, Leora and Luc Laeven and Roghuram Rajan, 2004, “Business Environment and Firm Entry: Evidence From International Data”, NBER Working Paper, No.10380.
Klitgaard, Robert, 1998, “International Cooperation Against Corruption”, IMF, Finance and Development.
Kmenta,Jan, 1986, “Elements of Econometrics.” 2nd ed. New York: Macmillan.
Koetse Mark J., Henri L.F. de Groot and Raymond J.G.M. Florax, 2006, “The Impact of Uncertainty on Investment: A Mega Analysis.” Tinbergen Institute Discussion Paper, No. TI 2006-060/3.
Kregel, J.A. and Eric Nasica, 1999, “Alternative Analyses of Uncertainty and Rationality: Keynes and Modern Economics.” La Probabilita in Keynes: Premesse e Infuenze, S. Marzetti Dall, Aste Brandolini and R. Scazzieri, eds., Bologna: Clueb:115-138.
Kregel, J.A., 1983, “Post- Keynesian Theory: An Overview.”, The Journal of Economic Education, 14(4):32-43.
Kregel, J.A., 1987, “Rational Spirits and The Post Keynesian Macrotheory of Micro Economics.” de Economist, 135(4):519-531.
Kregel, J.A., 1988, “Irving Fisher, Great- Grandparent of the General Theory.” Cahiers d’Economie Politique,14-15: 59-68.
Kregel, J.A., 1998, “Aspects of a Post Keynesian Theory of Finance.” Journal of Post Keynesian Economics,21(1):113-137.
Kregel, J.A., 1999, “Instability, Volatility and Process of Capital Accumulation.” in Economic Theory and Social Justice, G. Gandolfo and F. Marzano, eds., London: Macmillan, 149-167.
La Porta, Rafael and Florenico Lopez-de-Silanes, 1998, “Capital Market and Legal Institutions”, Harward university, Weatherhead Center for International Affairs.
Lambsdorff, Johann G.,1999a, “Corruption in Empirical Research A Review”, Transparency International Working Paper, downloadable from: http://gwdu05.gwdg.de/~uwvw/downloads/contributions05_lambsdorff.pdf .
Lambsdorff, Johann G.,1999b, “The Impact of Corruption on Capital Accumulation”, Gottingen University, Unpublished.
Lamech, Ranjit and Kazim Saeed, 2003, “What International Investors Look For When Investing in Developing Countries”, Energy and Mining sector Board Discussion Paper No.6.
Leahy, John V. and Toni M. Whited,1996, “The Effect of Uncertainty on Investment: Some Stylized Fact.” Journal of Money, Credit and Banking, Vol.28, No.1, pp.64-83.
Lee, Charles M.C. and David T. Ng, 2003, “Corruption and Investment Valuation: Does Virtue Pay?” Social Investment Forum Foundation, Key Finding of the 2003 Moskowitz Prize Winning Report.
Li, Quan and Adam Resnick, 2001, “Investors and Autocrats: Democratization and Foreign Direct Investment in 55 Less Developed Countries”, Presented at: The International Studies Association Annual Conference, Chicago, IL.
Li, Quan, 2005, “Democratic Institutions And Expropriation of Foreign Direct Investment”, Presented at The Political Economy of MNE conference at Washington University.
Loayza, Norman V. and Ana Maria Oviedo and Luis Serven, 2004, “Regulation and Macroeconomic Performance”. Downloadable from: www.wam.umd.edu/~amoviedo/Research/Regulation_macro_performance_sept.pdf Lovei, Laszlo and Alastair McKechine, “The Costs of Corruption For the Poor”, World Bank Viewpoint Note, No.2000.
Lui. Francis T., 1985, “An Equilibrium queuing Model of Bribery.” The Journal of Political Economy, 93(4): 760-781.
Maddala, G.S., Wu, S., 1999, “A comparative study of unit root tests with panel data and a new simple test.” Oxford Bulletin of Economics and Statistics 61: 631-652.
Marshall, Monty G. & Keith Jaggers, 2002, “Polity IV Project: Political Regime Characteristics, 1800-2002, Dataset Users’ Manual.” University of Maryland.
Mauro, Paolo, 1997, “The Effects of Corruption on Growth, Investment and Government Expenditure: A Cross-Country Analysis”, Institute For International Economics, Corruption and the Global Economy.
McMillan, John and Christopher Woodruff, 2002, “The Central Role Of Entrepreneurs in Transition Economies”, The Journal of Economic Perspectives, 16(3): 153-170.
Miralles, Dennis R., 2002, “Government Administrative Practices as Obstacles in Investment: A Case of The Philipines”, Pero, Lina, APEC Seminar on Investments’ One Stop Shop.
Modigliani, Franco and Merton H. Miller, 1958, “The Cost of Capital, Corporation Finance and the theory of Investment.” The American Economic Review, 48(3): 261-297.
Montgomery, Douglas C. and Elizabeth A. Peck and G. Geoffrey Vining, 2003, “Introduction to Linear Regression Analysis.” Third Edition, John Wiley and Sons, India.
North, Douglass C., 1993, “Institutions and Credible Commitment”, Journal of Institutional and Theoretical Economies, 149(1):11.
Novy-Marx, Robert, 2007, “An equilibrium model of investment under uncertainty.” The Review of Financial Studies, January.
OECD, 2003, “Public Sector Transparency and International Investment Policy”, Committee on International Investment and Multinational Enterprises.
OECD, 2005, “A Policy Framework For Investment: Infrastructure and Finance Services”, Brazil, Rio de Janeiro, OECD conference, Investment for Development: Making it Happen.
Oshikoya, Temitope W., 1994, “Macroeconomic Determinants of Domestic Private Investment in Africa: An Empirical Analysis”, Economic Development and Cultural Change, 42(3): 573-596.
Papaioannoa, Elias and Gregorios Siourounis, 2004, “Democratization and Growth”, London Business School Economics Working Paper.
Park, Hum M., 2005, “Linear Regression Models For Pool Data Using SAS, STATA, LIMDEP and SPSS.” The Trustees of Indiana University.
Perotti, Enrico and Paolo Volpin, 2004, “Lobbing on Entry”, EFA Maastricht Meeting Paper No.2277.
Pike, Richard and Bill Neale, 1996, “Corporate Finance and Investment Decisions and Strategies.” Second Edition, Prentice Hall Europe.
Pindyck, Robert, 1982, “Adjustment Costs, Uncertainty and the Behavior of the Firm”, American Economic Review, 72:415-427.
Pindyck, Robert, 1991, “Irreversibility, Uncertainty and Investment.” Journal of Economic Literature, 29(3):1110-1148.
Pindyck, Robert, 1992, “Investment of Uncertain Cost”, NBER, Working Paper Series No. 4175.
Pinheiro, Armando Castelar and Celia Cabral, 1999, “Credit Markets in Brazil: The Role Of Judicial Enforcement and Other Institutions”, Banco Interamericano de Desarrollo.
Plumper, T. and Vera Troeger and Philip Manow, 2005, “Panel Data Analysis in Comparative Politics: Linking Method to Theory.” European Journal of Political Research, 44(2): 327-354.
Plumper, Thomas and Vera E. Troeger, 2004, “The Estimation Of Time-Invariant Variables in Panel Analyses With Unit Fixed Effects.” 21th Polmeth Conference, Stanford University, 29-31 July 2004.
Plumper, Thomas and Vera E. Troeger, 2007, “Efficient Estimation of Time-Invariant and Rarely Changing Variables in Finite Sample Panel Analyses With Unit Fixed Effects.” Political Analysis, Oxford University Press.
Przeworski, Adam, Fernando Limongi, 1993, “Political Regimes and Economic Growth”, The Journal of Economic Perspectives, 7(3): 51-69.
Reinikka, Ritva and Jakob Sevensson, 1999, “Confronting Competition Investment Response and Constraints in Uganda”, World Bank Working Paper No.2242.
Rodionova, Yulia, 2001, “Administrative Corruption and Investment in Russia”, Northeast University Development Consortium Conference, September.
Rodrik, Dani, 1989, “Policy Uncertainty and Private Investment in Developing Countries”, NBER Working Paper No.2999.
Romer, David, 1996, “Advanced Macroeconomics”, McGraw-Hill. Ross, Sheldon M., 1999, “An Introduction to Mathematical Finance: Options and Other Topics.” Cambridge University Press.
Ross, Stephen A. and Randolph W. Westerfield and Bradford D. Jordan, 1998, “Fundamentals of Corporate finance.” Forth Edition, McGraw-Hill.
Sapienza, Paola, 2004 , “The effects of Government Ownership on Bank Lending”, Journal of Financial Economics, 72(2): 357-384.
Sarkees, Meredith Reid, 2000, "The Correlates of War Data on War: An Update to 1997," Conflict Management and Peace Science, 18(1): 123-144.
Scharfstein, David S. and Jeremy C. Stein, 2000, “The Dark Side of Internal Capital Markets: Divisional Rent Seeking and Inefficient Investment”, The Journal of Finance, 55(6).
Serven, Luis and A. Solimano, 1991, “Adjustment Policies and Investment Performance in developing countries: Theory, Country Experience and Policy Implications.” World Bank Working Paper Series, No.606.
Serven, Luis, 1997, “Uncertainty, Instability and Irreversible investment Theory, Evidence, and Lessons For Africa”, World Bank Policy Research Working Paper No.1722.
Serven, Luis, 1998, “Macroeconomic Uncertainty and Private Investment in Developing Countries: An Empirical Investigation.” World Bank Policy Research, No.2035.
Serven, Luis, 2002, “Real Exchange Rate Uncertainty and Private Investment in Developing Countries.” World Bank Policy Research Working Paper, No.2823.
Shahid Alam M., 1989, “Anatomy of Corruption: An Approach to The Political Economy of Underdevelopment”, American Journal of Economics and Sociology, 48(4): 441-456.
Sharifazadeh, Mohammadreza and Mohammad H. Bahreini, 2003, “ The Impact of Economic Security on Private Investment in Iran: 1979-2000.” Nameh Mofid, 38(9): 159-192.
Shirley, Mary M., 2003, “Institutions and Development”, Downloadable from: http://scid.stanford.edu/events/Shirley_Paper.pdf .
Sioum, Admasu Shiferaw, 2002, “Private Investment and Public Policy in Sub- Saharan Africa: An Empirical Analysis”, Netherlands, Institute of Social Studies Working Paper, No.356
Snodgrass, Donald, 1996, “The Economic Policy and Regulatory Environment”, Assessing the Impact of Micro-enterprise Services (AIMS).
Stanig, Piero, 2005, “Testing the Pooling Assumption With Cross-Section Time-Series Data: A Proposal and an Assessment with Simulation Experiments.” 22nd Annual Summer Meeting of The Society for Political Methodology, Florida, United States.
Stasavage, David, 2000, “Private Investment and Political Uncertainty”, London School Of Economics and Politics Science, The Suntory Center, Discussion Paper, No.DEDPS25.
Sterb, Jorge, 2001, “Political Uncertainty and Economic Development”, Estudios de Economica,28(1): 89-114.
Takii, Katsuya, 2004, “Prediction Ability and Investment Under Uncertainty.” University of Essex, Updated Version of Discussion Paper Series, No.518, (2000).
Tanzi, Vito and Hamid Davoodi, 1997, “Corruption, Public Investment and Growth”, IMF Working Paper No.WP/97/139.
Temple, Paul , Giovani Urga and Ciaran Driver ,2001, “The Influence of Uncertainty on Investment in The U.K.: A Macro or Micro Phenomenon?” Scottish Journal of Political Economy, 48(4).
The Heritage Fund, 2005, “Guide to Using The Road to Prosperity and Index Of Economic Freedom in Courses”.
Ulubasoghlu, Mehmet A. and Chris Doucouliagos, 2004, “Institutions and Economic Growth: A Systems Approach”, Econometric Society Australasian Meetings.
Weingast, Barry R., 1995, “The Economic Role of Political Institutions: Market Preserving Federalism and Economic Development”, Journal of Law, Economics and Organization, 11(1): 1-31.
Wilson, Sven E. & Daniel M. Butler, 2004, “A Lot More To Do: The Promise and Peril of Panel Data in Political Science.”, downloadable from: http://www.stanford.edu/~stormin/papers/Wilson%20and%20Butler%202.pdf .
Wooldridge, J.M., 2002, “Econometric Analysis of Cross Section and Panel Data.” Cambridge, MA:MIT Press.S.
World Bank, 2005a, “World Development Indicators.” The World Bank.
World Bank, 2005b, “World Development Report 2005: A Better Investment Climate for Everyone.” Oxford University Press.
Wu, Chin-En, 2004, “Regime Types, Structural Factors, and Economic Performance”, University of Michigan, PhD Thesis.
Yigit, Taner M.,2002 , “Effects of Inflation Uncertainty on Credit Markets: A Disequlibrium Approach.” Bilkent University, Working Paper No.0209.
Zalewski, David A., 1994, “An Empirical Analysis of Uncertainty of Investment During the Great Depression”, The Journal of Economic History, 54(2): 428-429.
Zemanovicova, Daniel and Emilia Sicakova and Miroslav Beblavy, “Obstacles to Open and Honest Government: An Overview of Corruption as a problem Affecting the Whole Society”, downloadable from: http://www.accessdemocracy.org/NDI/library/1373_ww_courption.pdf.