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Taxation, Investment, and Firm Growth with Heterogeneous Capital

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Author Info
Cummins, J.G.
Dey, M.

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Abstract

Capital heterogeneity has largely been ignored in studies of investemtn behaviour. We estimate a dynamic structural model in which different types of capital are interrelated in both the production and adjustment cost technologies. Our result help explain some of the empirical failings of the neoclassical model. We show that when capital heterogeneity is ignored estimates of the adjustment costs are biased upward, and estimates of factor substitution in production are biased downward.

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File URL: http://econ.as.nyu.edu/docs/IO/9381/RR98-07.PDF
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Publisher Info
Paper provided by C.V. Starr Center for Applied Economics, New York University in its series Working Papers with number 98-07.

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Length: 37 pages
Date of creation: 1998
Date of revision:
Handle: RePEc:cvs:starer:98-07

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Postal: C.V. Starr Center, Department of Economics, New York University, 19 W. 4th Street, 6th Floor, New York, NY 10012
Phone: (212) 998-8936
Fax: (212) 995-3932
Web page: http://econ.as.nyu.edu/object/econ.cvstarr.html
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Postal: C.V. Starr Center, Department of Economics, New York University, 19 W. 4th Street, 6th Floor, New York, NY 10012
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Related research
Keywords: PRODUCTION ; INVESTMENTS ; CAPITAL GOODS;

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Find related papers by JEL classification:
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
E22 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
E23 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Production

References listed on IDEAS
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Alessandra Del Boca & Marzio Galeotti & Paola Rota, 2003. "Non-convexities in the Adjustment of Different Capital Inputs: A Firm-level Investigation," Working Papers 2003.35, Fondazione Eni Enrico Mattei. [Downloadable!]
    Other versions:
  2. Daniel Wilson, 2004. "IT and Beyond: The Contribution of Heterogenous Capital to Productivity," Working Papers 04-20, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
    Other versions:
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