The paper investigates the impact of the irreversibility of investments and competition on the sign of the relationship between investment and uncertainty. The empirical analysis uses firm-level data and is based on a survey of over 800 Polish non?financial companies carried out by the National Bank of Poland in 2006.
We demonstrate that the relationship between investment and uncertainty is influenced by the extent to which investments are irreversible. The results indicate that in the case of irreversibility the relationship between uncertainty and investment becomes negative. However, the degree of market power the investor enjoys in the product market turned out to be insignificant for the investigated relationship.

Keywords: firm investment, uncertainty, irreversibility
JEL: D81, D92, C24

  Piotr Popowski, Agnieszka Sawicka - Some Aspects of the Impact of Uncertainty on Investment Decisions Made by Polish Enterprises: Results of an Empirical Study - plik pdf; (490 KB)