Abstract

We have focused our attention on the fact that in an uncertain world, expectations
play an important role when decisions about production and investment are made.
In spite of dealing with different problems, decisions about production and investment are
interrelated because, once is explicitly considered, long term decisions have to be translated
into short term procedures. We suggested that several variables could be identified as
guiding investment decisions: expectations about prospective yields, internal savings and
unexploited internal facilities to diversify the production line and, finally, the conditions to
debt finance new investment plans.

JEL Classification: E12; E22.