Persistence, asymmetries and interrelation in factor demand

Peeters, Marga (1998): Persistence, asymmetries and interrelation in factor demand. Published in: Scandinavian Journal of Economics , Vol. 4, No. 100 : pp. 747-764.

Abstract

A neoclassical factor demand model for structures, equipment and labour is analyzed. 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 US, Canada, West Germany, the UK (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.

• Item Type: MPRA Paper
• Language: English
• Keywords: factor demand; time-to-build; adjustment costs; business cycles; general method of moments; structures; equipment; gestation; irreversibility
• Subjects: D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory; C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C32 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes ; State Space Models; C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables; D - Microeconomics > D9 - Intertemporal Choice > D92 - Intertemporal Firm Choice, Investment, Capacity, and Financing; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J23 - Labor Demand

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