Sequentiality versus simultaneity : interrelated factor demand
Working paper
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http://hdl.handle.net/11250/163244Utgivelsesdato
2010-12Metadata
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Sammendrag
A structural model is developed and estimated by a maximum likelihood routine to investigate
interrelated factor demand subject to nonconvex adjustment costs. The dataset concerns
Norwegian plants operating in manufacturing industries and it covers the period 1993-2005.
The estimates indicate that it is advantageous to adjust the stock of labour and capital
simultaneously. The cost advantage of simultaneous changes is small for capital but is large
for labour. The empirical results suggest that when estimating separate factor demand models
the bias of parameter estimates is most severe in case of labour demand.
Utgiver
Norwegian School of Economics and Business Administration. Department of EconomicsSerie
Discussion paper2010:29