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The Structure of Adjustment Costs in Information Technology Investment

Author

Listed:
  • Hyunbae Chun

    (Queens College, City University of New York)

  • Sung-Bae Mun

    (Korea Information Strategy Development Institute)

Abstract

We examine the pattern of information technology (IT) capital adjustment using data from U.S. industries. Using the gap between actual and desired IT capital stocks, we estimate the shape of the adjustment cost function in IT investment. Both ordinary least squares and nonparametric regression estimates support irreversibility in IT investment.

Suggested Citation

  • Hyunbae Chun & Sung-Bae Mun, 2005. "The Structure of Adjustment Costs in Information Technology Investment," Economics Bulletin, AccessEcon, vol. 5(4), pages 1-9.
    • Handle: RePEc:ebl:ecbull:eb-05e20001
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    References listed on IDEAS

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    Cited by:

    1. Elena Ketteni, 2009. "Information technology and economic performance in U.S industries," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 42(3), pages 844-865, August.

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    More about this item

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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