Financing and Investment in Plant and Equipment and Research and Development
In this stuy a dynamic model of firm behavior is developed which integrates real and financial decisions. The model combines the effects of capital structure and input adjustirent costs on the process of capital accumulation. The existence, uniqueness and stability conditions of the long-run eguilibrium and the dynamic properties of the factor demand are explored. The equations derived from the theoretical model are estimated using firm cross-section time series data. The results indicate that for both Plant and Equipment (P&E) and Research and Development (R&D),the debt-eguity ratio significantly affects the investment demands and the elasticities are highly inelastic. The effect is stronger for P&E than for R&D capital in the long run, while the effects on P&E and R&D investment are quite similar in the short run.
|Date of creation:||Nov 1982|
|Publication status:||published as Bernstein, Jeffrey I. and M. Ishaq Nadiri. "Financing and Investment in Plant and Equipment and Research and Development," Prices, Competition and Equilibrium, eds. M.H. Peston and R.E. Quandt, Oxford: Philip Allan; Totowa, N.J.: Barnes and Noble. 1986.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
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.:
- Jorgenson, Dale W, 1971. "Econometric Studies of Investment Behavior: A Survey," Journal of Economic Literature, American Economic Association, vol. 9(4), pages 1111-47, December.
- Feldstein, Martin & Sheshinski, Eytan & Green, Jerry, 1979.
"Corporate Financial Policy and Taxation in a Growing Economy,"
3203643, Harvard University Department of Economics.
- Martin Feldstein & Jerry Green & Eytan Sheshinski, 1979. "Corporate Financial Policy and Taxation in a Growing Economy," The Quarterly Journal of Economics, Oxford University Press, vol. 93(3), pages 411-432.
- Robert E. Lucas & Jr., 1967. "Adjustment Costs and the Theory of Supply," Journal of Political Economy, University of Chicago Press, vol. 75, pages 321-321.
- Treadway, Arthur B, 1971. "The Rational Multivariate Flexible Accelerator," Econometrica, Econometric Society, vol. 39(5), pages 845-55, September.
- Mark Schankerman & M. Ishaq Nadiri, 1982. "Investment in R&D, Costs of Adjustment and Expectations," NBER Working Papers 0931, National Bureau of Economic Research, Inc.
- Zvi Griliches, 1980.
"Returns to Research and Development Expenditures in the Private Sector,"
in: New Developments in Productivity Measurement, pages 419-462
National Bureau of Economic Research, Inc.
- Zvi Griliches, 1998. "Returns to Research and Development Expenditures in the Private Sector," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 49-81 National Bureau of Economic Research, Inc.
- Mervyn A. King, 1974. "Taxation and the Cost of Capital," Review of Economic Studies, Oxford University Press, vol. 41(1), pages 21-35.
- J. D. Howe & D. G. McFetridge, 1976. "The Determinants of R & D Expenditures," Canadian Journal of Economics, Canadian Economics Association, vol. 9(1), pages 5771-5771, February.
- M. Ishaq Nadiri & George C. Bitros, 1980. "Research and Development Expenditures and Labor Productivity at the Firm Level: A Dynamic Model," NBER Chapters, in: New Developments in Productivity Measurement, pages 387-418 National Bureau of Economic Research, Inc.
- Brock, William A & Turnovsky, Stephen J, 1981. "The Analysis of Macroeconomic Policies in Perfect Foresight Equilibrium," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(1), pages 179-209, February.
- Nadiri, M. Ishaq & Schankerman, Mark, 1982. "Investment in R&D, Costs of Adjustment and Expectations," Working Papers 82-20, C.V. Starr Center for Applied Economics, New York University.
- Engle, Robert F & Foley, Duncan K, 1975. "An Asset Price Model of Aggregate Investment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 16(3), pages 625-47, October.
- Morrison, C. J. & Berndt, E. R., 1981. "Short-run labor productivity in a dynamic model," Journal of Econometrics, Elsevier, vol. 16(3), pages 339-365, August.
- Mussa, Michael L, 1977. "External and Internal Adjustment Costs and the Theory of Aggregate and Firm Investment," Economica, London School of Economics and Political Science, vol. 44(174), pages 163-78, May.
- Stiglitz, Joseph E., 1973. "Taxation, corporate financial policy, and the cost of capital," Journal of Public Economics, Elsevier, vol. 2(1), pages 1-34, February.
- Tobin, James, 1969. "A General Equilibrium Approach to Monetary Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 1(1), pages 15-29, February.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:1017. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.