Real versus Financial Frictions to Capital Investment¤
نویسندگان
چکیده
We examine the investment behavior of a panel of German manufacturing ...rms for the time period from 1992 to 2000. Our methodology is structural and has several steps: First, we identify the pro...tability shocks that move investment demand at the ...rm level. Then, we specify an array of adjustment costs and capital market imperfections possibly in‡uencing optimal ...rm investment response to these shocks. Finally, we use an indirect inference procedure as in Gourieroux, Monfort and Renault (1993) and Smith (1993) to estimate the structural parameters. Our goal is to characterize the relative importance of ...nancing constraints and various costs of adjustment in German manufacturing.
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