Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/118049
Authors: 
Del Boca, Alessandra
Galeotti, Marzio
Rota, Paola
Year of Publication: 
2003
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 35.2003
Abstract: 
Recent developments in investment research have highlighted the importance of non-convexities and irreversibilities in the firms' adjustment of quasi-fixed inputs. However, aggregation across capital goods may smooth out the discontinuities associated with the adjustment of individual assets. The lack of suitable data is one of the reasons why empirical work has strongly relied on the assumption of capital homogeneity. In this paper we exploit a new data set of 1539 Italian firms which allows us to disaggregate capital and consider separately purchases and sales of assets. We disaggregate between equipment and structures and construct measures of fundamental Q to capture investment opportunities associated with each asset. To uncover the pattern of dynamic adjustment we use non-parametric techniques to relate each individual investment to own fundamental Q.
Subjects: 
Investment
heterogenous capital
non-convexities
fundamental Q
panel data
JEL: 
D24
G31
C33
C34
Document Type: 
Working Paper

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