the flexible accelerator theory argued that investment is determined by expected aggregate demand (which represent accelerator) and cost of capital. However, studies such as Dehn (2000), Erden and Holcombe (2005), Shih, Kraemer and Dedrick (2007) and Twine, Kiiza and Bashaasha (2015) among others have argued that flexible accelerator model is suitable for analysing investment behaviour in 6 developing countries because it allows investment to vary with other relevant variables, including business environment and institutional setting.
