Journal Article

Asymmetric Adjustment of Dynamic Factors at the Firm Level

Alfons Oude Lansink and Spiro E. Stefanou

in American Journal of Agricultural Economics

Published on behalf of Agricultural and Applied Economics Association

Volume 79, issue 4, pages 1340-1351
Published in print November 1997 | ISSN: 0002-9092
Published online November 1997 | e-ISSN: 1467-8276 | DOI: http://dx.doi.org/10.2307/1244290
Asymmetric Adjustment of Dynamic Factors at the Firm Level

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This study provides a framework for consistent estimation of a dynamic dual model of investment for the case where data reveal zero and nonzero investments. The threshold model that is developed maintains that investments are zero if the shadow value of machinery is between a lower and an upper threshold. Separate equations are estimated for the investment and the disinvestment regime. A significant difference between the parameters of the investment and disinvestment equations is found. The stock of machinery adjusts slower toward the long-run equilibrium target during an investment regime than during a contracting regime.

Keywords: asymmetric dynamic adjustment; investment demand; G310; Q120

Journal Article.  0 words. 

Subjects: Agricultural Economics ; Corporate Governance

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