Irreversibilities in Fixed Capital Adjustment - Evidence from Mexican and Colombian Plants
Posted: 2 Apr 2002
Abstract
Using two largely novel datasets, we examine how Colombian and Mexican plants invest in response to imbalances between actual and "desired" capital stock levels. Nonparametric estimates of the average adjustment function support the presence of irreversibilities, but not of nonconvexities.
Keywords: Adjustment costs, investment, irreversibilities, plant-level evidence
JEL Classification: E22, O16
Suggested Citation: Suggested Citation
Gelos, R. Gaston and Isgut, Alberto, Irreversibilities in Fixed Capital Adjustment - Evidence from Mexican and Colombian Plants. Available at SSRN: https://ssrn.com/abstract=303981
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