The flexible accelerator model of investment: An application to Ugandan tea-processing firms
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Date
2015
Journal Title
Journal ISSN
Volume Title
Publisher
African journal of agricultural and resource economics
Abstract
The study uses the flexible accelerator model to examine determinants of the level and growth of
investment in machinery and equipment for a sample of tea-processing firms in Uganda. Using a
dynamic panel data model, we find that, in the long run, the level of investment in machinery and
equipment is positively influenced by the accelerator, firm-level liquidity, and a favourable investment
climate in the country. Depreciation of the exchange rate negatively affects investment. We conclude
that firm-level strategies that increase output and profitability, and a favourable investment policy
climate, are imperative to the growth of the tea industry.
Description
Keywords
Accelerator model, Fixed asset investments, Ugandan tea-processing firms
Citation
Twine, E. E., Kiiza, B., & Bashaasha, B. (2015). The flexible accelerator model of investment: An application to Ugandan tea-processing firms. African journal of agricultural and resource economics, 10(311-2016-5623).