Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/155251
Authors: 
Bontempi, Elena
Del Boca, Alessandra
Franzosi, Alessandra
Galeotti, Marzio
Rota, Paola
Year of Publication: 
2001
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 88.2001
Abstract: 
In this paper we study the determinants of investment decisions at the firm level with heterogeneous capital goods. We exploit a newly developed panel dataset of small and medium-sized firms which allows us to distinguish between purchases, sales, and net acquisitions of capital goods. We distinguish between equipment and structures and test the assumption of convex adjustment costs. Since our firms are mostly unlisted, the standard Q model based on stock market valuation is no longer appropriate. Instead, we use the fundamental Q approach proposed by Abel and Blanchard (1986) and Gilchrist and Himmelberg (1995) and extend it to the case of several capital inputs. The results show that the standard convex costs model fits very well equipment and but not structures. We find evidence for non-convexities in the case of structures.
Subjects: 
Investment
Q
heterogeneous capital goods
VAR estimation
panel data
JEL: 
D24
G31
C33
C34
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.