Multinational versus National Firms on Capital Adjustment Costs: A Structural Approach

Multinational versus National Firms on Capital Adjustment Costs: A Structural Approach

This paper provides a different perspective on the firm-level empirical analysis of the relation between foreign ownership and capital demand adjustment in host countries. The author estimates a dynamic structural model of investment on a sample of 4672 Belgian firms observed between 2003 and 2010 that permits to distinguish the ‘ownership status’ of firms. He considers a dynamic discrete choic...

On the Nature of Capital Adjustment Costs

This paper studies the nature of capital adjustment at the plant-level. We use an indirect inference procedure to estimate the structural parameters of a rich specification of capital adjustment costs. In effect, the parameters are optimally chosen to reproduce ∗The authors thank the National Science Foundation for financial support. Andrew Figura, Chad Syversons and Jon Willis provided excelle...

Labor Adjustment Costs and Capital Structure Decisions

This paper investigates how the costs associated with dismissing employees impact a firm’s capital structure decisions. I hypothesize that increases in these labor adjustment costs reduce a firm’s optimal amount of debt financing by lowering expected profitability and raising financial distress costs and operating leverage. To test this hypothesis, I adopt a difference-in-differences research d...

Factor adjustment costs: A structural investigation

This paper assesses various capital and labor adjustment costs functions estimating a general equilibrium framework with Bayesian methods using US aggregate data. The estimation finds that the adjustment costs are convex in both capital and labor and allowing for their joint interaction is important. The structural model enables us to identify the response of factor adjustment costs to exogenou...

Functional versus Capability-oriented Innovation Management in Multinational Firms