Understanding investment behaviour

How, when and why do firms invest? Graeme Guthrie, Professor of Economics and Finance, will investigate these questions as part of a $400,000 Marsden-funded study to advance our understanding of firms’ investment behaviour.

Graeme will apply a theoretical framework, called real-options analysis, to find out how firms’ behaviour is affected by the economic environment in which they operate. He will examine how uncertainty about the future affects behaviour, and the interactions between firms and their competitors. This will include considering the impact of short, sharp economics shocks as well as small, long-lasting shocks.