highly sensitive to uncertainty. We briefly summarize the theory, stressing its empirical implications. We then use cross …-section and time-series data for a set of developing and industrialized countries to explore the relevance of the theory for … - affects investment as the theory suggests, but the size of the effect is moderate, and is greatest for developing countries …

This paper extends the theory of investment under uncertainty to incorporate fixed costs of investment, a wedge between …, investment is positive and is an increasing function of q, as is standard in the theory branch of the adjustment cost literature …

by the theory receive little support from the data …