The Impact of Macro Economic Uncertainty on Investments

This paper studies the impact of macro economic uncertainty on the direct and indirect investments of non-financial companies during 2001-2009 by using the random effect model of panel data. The results show that the macro economic uncertainty calculated by the GARCH model has different effects on the direct and indirect investments. That is, macro economic uncertainty restrains the direct investments significantly, but it has no significant impact on the indirect investments. Meanwhile, direct and indirect investments are of continuity. The results also indicate that remaining the consistency and transparence of the economic policies helps to stimulate the investment of companies.