Persistence, Asymmetries and Interrelation in Factor Demand
A neoclassical factor demand model for structures, equipment and labour is analyzed in this paper. It incorporates a variety of dynamic specifications, such as a multi-period time-to-build for structures, internal adjustment costs for each production factor, and external investment adjustment costs. First-order conditions of the model are estimated by the generalized method of moments using manufacturing industry data from the United States, Canada, West Germany, the United Kingdom (all 1960.I-1988.IV), France (1970.I-1992.II) and the Netherlands (1971.I-1990.IV). The results endorse time-to-build for structures, persistence of technology shocks and interrelations in adjustment cost dynamics. Copyright 1998 by The editors of the Scandinavian Journal of Economics.
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Volume (Year): 100 (1998)
Issue (Month): 4 (December)
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