Asset Specificity of Nonfinancial Firms

Abstract We develop a new data set to study asset specificity among nonfinancial firms. Our cover the liquidation values of each category assets on firms’ balance sheets and provides information across major industries. First, we find that firms have high specificity. For example, value fixed is 35% net book in average industry. Second, analyze determinants document assets’ physical attributes (e.g., mobility, durability, customization) play crucial role. Third, investigate several implications. Consistent with theories investment irreversibility, associated less disinvestment stronger effects uncertainty activities. also increasing prevalence intangible has not significantly reduced values.