Analyze the Effect of Uncertainty on Investment in the Selected Developing Countries

The main feature of investment in the real world is uncertainty، Mainly in the traditional theory of investment has been neglected. However، cash flows of investment and the economic environment will affect. This paper aims to evaluate the effect of uncertainty on investment in the developing countries. Thus، in the framework of Sarker (2003) and Horioka - Feldstein (1980)، the effect of uncertainty on investment in 27 developing countries have been tested. FH pattern in the regression model based on panel data techniques in the period 1980-2008 is estimated. The results indicate that uncertainty reduce domestic investment significantly and non-linear. However، this conclusion reflects this fact that despite the uncertainty، investors will be provided through the allocation of domestic savings.