A Dynamic Factor Demand Model for the Swedish Pulp Industry, 1998
AbstractIn this paper we specify and estimate a dynamic factor demand model for the Swedish pulp industry. Firms are assumed to have rational expectations and costs of adjustment will arise when the capital stock is altered. The estimates are based on plant level panel data for the period 1972-1990. We find weak evidence of the presence of adjustment costs. All the estimated own price elasticities are negative and the empirical cost function have all the desired properties from theory. The result suggest that user cost of capital is a significant determinant of pulp industry investment, while output level is not. We also find that pulp industry investment is insensitive to variations in the price of electricity.
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Bibliographic InfoPaper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number 479.
Length: 20 pages
Date of creation: 18 Oct 1998
Date of revision:
Contact details of provider:
Postal: Department of Economics, Umeå University, S-901 87 Umeå, Sweden
Phone: 090 - 786 61 42
Fax: 090 - 77 23 02
Web page: http://www.econ.umu.se/
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factor demand; dynamic optimization; panel data; bootstrap;
Find related papers by JEL classification:
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
This paper has been announced in the following NEP Reports:
- NEP-ALL-2000-03-20 (All new papers)
- NEP-ENV-2000-03-20 (Environmental Economics)
- NEP-TID-2000-03-21 (Technology & Industrial Dynamics)
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- Ankarhem, Mattias, 2005. "Effects of Increased Demand for Biofuels: A Dynamic Model of the Swedish Forest Sector," UmeÃ¥ Economic Studies 658, Umeå University, Department of Economics.
- Bengt Kristrom & Tommy Lundgren, 2003. "Abatement investments and green goodwill," Applied Economics, Taylor & Francis Journals, vol. 35(18), pages 1915-1921.
- Hammar, Henrik & Lundgren, Tommy & Sjöström, Magnus, 2006. "The significance of transport costs in the Swedish forest industry," Working Paper 97, National Institute of Economic Research.
- Ankarhem, Mattias, 2005. "Bioenergy, Pollution, and Economic Growth," UmeÃ¥ Economic Studies 661, Umeå University, Department of Economics.
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