Irreversibility and Private Investment Decisions under Uncertainty

Developing countries are in dire need of sustainable economic growth and theoretical literature suggests the resurgence of private investment as a panacea for rapid economic growth. This calls for the examination of the determinants of private investment in the literature. Recent works have, however, indicated that the lost option value of investment and effect of uncertainty can be large but empirical literature on this issue is scanty in developing countries. The book, thus, examines private investment decisions in Nigeria and provides improved understanding and more dynamic framework for private investment decisions in the wake of irreversibility and uncertainty. The book concludes that high levels of uncertainty indicators cause private investment to decline while irreversibility affects the timing of private investment spending in the short run and makes private investors less eager to invest thus impacting negative effect on investment spending. The book is relevant to academia in the context of policy discussion on the causes of Africa's dismal growth performance and offers important guidelines for designing more effective policies as regards private investment decisions.

Autorentext

B.A. Folorunso, Ph.D. in Economics: a Senior Lecturer at Obafemi Awolowo University, Ile-Ife, Nigeria, specializes in Monetary and Development Economics. He has attended many international conferences with twenty published articles. His M.Sc. and Ph.D. Theses won CODESRIA's awards. He is a member of the Nigerian Economic Society, SSRN and CODESRIA.