On the Nature of Capital Adjustment Costs
Russell W. Cooper and
Review of Economic Studies, 2006, vol. 73, issue 3, 611-633
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. Copyright 2006, Wiley-Blackwell.
References: Add references at CitEc
Citations View citations in EconPapers (247) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
Working Paper: On the Nature of Capital Adjustment Costs (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:73:y:2006:i:3:p:611-633
Access Statistics for this article
Review of Economic Studies is currently edited by Andrea Prat, Bruno Biais, Kjetil Storesletten and Enrique Sentana
More articles in Review of Economic Studies from Oxford University Press
Bibliographic data for series maintained by Oxford University Press ().