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Asymmetric Adjustment of Dynamic Factors at the Firm Level

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  • Alfons Oude Lansink
  • Spiro E. Stefanou

Abstract

This study provides a framework for consistent estimation of a dynamic dual model of investment for the case where data reveal zero and nonzero investments. The threshold model that is developed maintains that investments are zero if the shadow value of machinery is between a lower and an upper threshold. Separate equations are estimated for the investment and the disinvestment regime. A significant difference between the parameters of the investment and disinvestment equations is found. The stock of machinery adjusts slower toward the long-run equilibrium target during an investment regime than during a contracting regime. Copyright 1997, Oxford University Press.

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File URL: http://hdl.handle.net/10.2307/1244290
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Bibliographic Info

Article provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.

Volume (Year): 79 (1997)
Issue (Month): 4 ()
Pages: 1340-1351

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Handle: RePEc:oup:ajagec:v:79:y:1997:i:4:p:1340-1351

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Cited by:
  1. Verreth, Daphne M.I. & Emvalomatis, Grigorios & Bunte, Frank H.J. & Oude Lansink, Alfons G.J.M., 2011. "Dynamic adjustments in the Dutch greenhouse sector due to environmental regulations," 122nd Seminar, February 17-18, 2011, Ancona, Italy 99364, European Association of Agricultural Economists.
  2. Sckokai, Paolo & Moro, Daniele, 2005. "Modelling the Impact of the CAP Reform on Farm Investments," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24468, European Association of Agricultural Economists.
  3. Feinerman, Eli & Peerlings, Jack H.M., 2002. "Uncertain Land Availability and Perceived Biases in Investment Decisions: The Case of Dutch Dairy Farms," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24949, European Association of Agricultural Economists.
  4. Polman, Nico B.P. & Peerlings, Jack H.M., 2002. "The Role of Transaction Costs and Bargaining Power in Wildlife and Landscape Services Production: A Micro-Econometric Model for Dutch Dairy Farms," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24948, European Association of Agricultural Economists.
  5. Wheatley, W. Parker & Liu, Donald J. & del Ninno, Carlo, 2001. "Empirical Analysis Of Hysteresis In Rural Labor Markets In A Developing Country: The Case Of Bangladesh," 2001 Annual meeting, August 5-8, Chicago, IL 20594, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  6. Tack, Jesse B. & LaFrance, Jeffrey T., 2010. "Agricultural Arbitrage, Adjustment Costs, and the Intensive Margin," 2010 Annual Meeting, February 6-9, 2010, Orlando, Florida 56412, Southern Agricultural Economics Association.
  7. Boetel, Brenda L. & Hoffmann, Ruben & Liu, Donald J., 2004. "Estimating Investment Rigidity Within A Threshold Regression Framework: The Case Of U.S. Hog Production Sector," Staff Papers 13790, University of Minnesota, Department of Applied Economics.
  8. Richards, Timothy J. & Nganje, William E. & Acharya, Ram N., 2008. "Hysterisis in Food Safety Investments," 110th Seminar, February 18-22, 2008, Innsbruck-Igls, Austria 49888, European Association of Agricultural Economists.
  9. Gardebroek, Cornelis & Oude Lansink, Alfons G.J.M., 2008. "Dynamic Microeconometric Approaches To Analysing Agricultural Policy," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6592, European Association of Agricultural Economists.
  10. Alejandro Onofri & Lilyan Fulginiti, 2008. "Public inputs and dynamic producer behavior: endogenous growth in U.S. agriculture," Journal of Productivity Analysis, Springer, vol. 30(1), pages 13-28, August.
  11. Frank Asche & Subal Kumbhakar & Ragnar Tveteras, 2008. "A dynamic profit function with adjustment costs for outputs," Empirical Economics, Springer, vol. 35(2), pages 379-393, September.
  12. Jakob Vesterlund Olsen & Arne Henningsen, 2011. "Investment Utilisation, Adjustment Costs, and Technical Efficiency in Danish Pig Farms," IFRO Working Paper 2011/13, University of Copenhagen, Department of Food and Resource Economics.
  13. Pinar Celikkol & Spiro Stefanou, 2004. "Productivity Growth Patterns in U.S. Food Manufacturing: Case of Dairy Products Industry," Working Papers 04-08, Center for Economic Studies, U.S. Census Bureau.
  14. Oude Lansink, Alfons G.J.M. & Pietola, Kyosti, 2002. "Semi-Parametric Modeling of Investments in Energy Installations," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24813, European Association of Agricultural Economists.
  15. Lagerkvist, Carl Johan & Olson, Kent D., 2001. "Asymmetric Information, Capital Structure And Agricultural Investment," 2001 Annual meeting, August 5-8, Chicago, IL 20652, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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