TY  - JOUR
AU  - Cooper,Russell W.
AU  - Haltiwanger,John C.
TI  - On the Nature of Capital Adjustment Costs
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7925
PY  - 2000
Y2  - September 2000
UR  - http://www.nber.org/papers/w7925
L1  - http://www.nber.org/papers/w7925.pdf
N1  - Author contact info:
Russell Cooper
Department of Economics
European University Institute
via della Piazzola, 43
Firenze, 50133
ITALY
E-Mail: russellcoop@gmail.com

John C. Haltiwanger
Department of Economics
University of Maryland
College Park, MD 20742
Tel: 301/405-3504
Fax: 301/405-3542
E-Mail: haltiwan@econ.umd.edu
AB  - 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 nonlinear relationship between investment and profitability that we uncover in the plant-level data. Our findings indicate that a model which mixes both convex and nonconvex adjustment costs with irreversibility fits the data best.
ER  -