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The Facts About Time: To-Build

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  • Petya Koeva Brooks
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    Abstract

    This paper presents new empirical evidence about the process of plant investment. Using newspaper and trade journal articles, the author collects and analyzes time-to-build data for a sample of Compustat firms. These data suggest that the average construction lead time for new plants is around two years in most industries. Business cycle fluctuations do not affect the length of time-to-build. The investment lead times are generally not sensitive to the size of the projects. Only nine percent of the firms in the sample deviate from their investment schedules and delay or abandon their projects.

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 00/138.

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    Length: 22
    Date of creation: 01 Aug 2000
    Date of revision:
    Handle: RePEc:imf:imfwpa:00/138

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    Cited by:
    1. Pacheco de Almeida, Goncalo & Zemsky, Peter, 2002. "Time-to-Build and Strategic Investment Under Uncertainty," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3674, C.E.P.R. Discussion Papers.
    2. Jönsson, Kristian, 2004. "Real Exchange Rate and Consumption Fluctuations following Trade Liberalization," Working Paper Series in Economics and Finance 568, Stockholm School of Economics, revised 04 Jan 2005.
    3. Tsoukalas, John, 2009. "Time to Build Capital: Revisiting Investment-Cash Flow Sensitivities," MPRA Paper 18640, University Library of Munich, Germany.
    4. Petya Koeva Brooks, 2001. "Time-To-Build and Convex Adjustment Costs," IMF Working Papers 01/9, International Monetary Fund.
    5. Stephen Murchison & Andrew Rennison & Zhenhua Zhu, 2004. "A Structural Small Open-Economy Model for Canada," Working Papers, Bank of Canada 04-4, Bank of Canada.
    6. Sameh Hachicha & Leila Kaaniche & Fathi Abid, 2011. "Sequential investment and delay: an agribusiness firm case study," Agricultural Finance Review, Emerald Group Publishing, Emerald Group Publishing, vol. 71(2), pages 240-258, July.
    7. Tsyplakov, Sergey, 2008. "Investment frictions and leverage dynamics," Journal of Financial Economics, Elsevier, Elsevier, vol. 89(3), pages 423-443, September.
    8. Alain Gabler, 2008. "Sector-specific Markup Fluctuations and the Business Cycle," 2008 Meeting Papers 88, Society for Economic Dynamics.
    9. Emek Basker & Pham Hoang Van, 2005. "Putting a Smiley Face on the Dragon: Wal-Mart as Catalyst to U.S.-China Trade," Working Papers, Department of Economics, University of Missouri 0506, Department of Economics, University of Missouri, revised 07 Oct 2005.
    10. Edge, Rochelle M., 2007. "Time-to-build, time-to-plan, habit-persistence, and the liquidity effect," Journal of Monetary Economics, Elsevier, Elsevier, vol. 54(6), pages 1644-1669, September.
    11. Emami Namini, Julian, 2014. "The short and long-run impact of globalization if firms differ in factor input ratios," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 38(C), pages 37-64.
    12. Jonathan N. Millar, 2005. "Gestation lags for capital, cash flows, and Tobin's Q," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2005-24, Board of Governors of the Federal Reserve System (U.S.).
    13. repec:dgr:uvatin:2009020 is not listed on IDEAS
    14. Charles Himmelberg & Alessandra del Boca & Marzio Galeotti & Paola Rota, 2005. "Investment and Time to Plan: A Comparison of Structures vs. Equipment in a Panel of Italian Firms," Working Papers, Fondazione Eni Enrico Mattei 2005.54, Fondazione Eni Enrico Mattei.
    15. Jönsson, Kristian, 2005. "Real Exchange Rate and Consumption Fluctuations following Trade Liberalization," Working Paper Series 187, Sveriges Riksbank (Central Bank of Sweden).

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