TY - JOUR
T1 - On the nature of capital adjustment costs
AU - Cooper, Russell W.
AU - Haltiwanger, John C.
N1 - Funding Information:
Acknowledgements. The authors thank the National Science Foundation for financial support. Andrew Figura, Chad Syversons, and Jon Willis provided excellent research assistance in this project. We are grateful to Shutao Cao for his comments on the final version of this paper. Comments and suggestions from referees and the editor of this journal are gratefully acknowledged. We are grateful to Andrew Abel, Victor Aguirregabiria, Ricardo Caballero, Fabio Canova, V. V. Chari, Jan Eberly, Simon Gilchrist, George Hall, Adam Jaffe, Patrick Kehoe, John Leahy, David Runkle, and Jon Willis for helpful discussions in the preparation of this paper. Helpful comments from seminar participants at Boston University, Brandeis, CenTER, Columbia University, the 1998 Winter Econometric Society Meeting, the University of Bergamo, and IFS Workshop on Applied Economics, the University of Texas at Austin, UQAM, Federal Reserve Bank of Cleveland, Federal Reserve Bank of Minneapolis, Federal Reserve Bank of New York, Pennsylvania State University, Wharton School, McMaster University, Pompeu Fabra, Yale, and the NBER Summer Institute are greatly appreciated. The data used in this paper were collected under the provisions of Title 13 U.S. Code and are available for use at the Center for Economic Studies (CES) at the U.S. Bureau of the Census. The research in this paper was conducted by the authors as Research Associates of CES. The views expressed here do not represent those of the U.S. Census Bureau.
PY - 2006/7
Y1 - 2006/7
N2 - This paper studies the nature of capital adjustment at the plant level. We use an indirect inference procedure to estimate the structural parameters of a rich specification of capital adjustment costs. In effect, the parameters are optimally chosen to reproduce a set of moments that capture the non-linear relationship between investment and profitability found in plant-level data. Our findings indicate that a model, which mixes both convex and non-convex adjustment costs, fits the data best.
AB - This paper studies the nature of capital adjustment at the plant level. We use an indirect inference procedure to estimate the structural parameters of a rich specification of capital adjustment costs. In effect, the parameters are optimally chosen to reproduce a set of moments that capture the non-linear relationship between investment and profitability found in plant-level data. Our findings indicate that a model, which mixes both convex and non-convex adjustment costs, fits the data best.
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U2 - 10.1111/j.1467-937X.2006.00389.x
DO - 10.1111/j.1467-937X.2006.00389.x
M3 - Article
AN - SCOPUS:33745841282
SN - 0034-6527
VL - 73
SP - 611
EP - 633
JO - Review of Economic Studies
JF - Review of Economic Studies
IS - 3
ER -