| Description |
1 online resource (53 pages) : illustrations |
| Series |
IMF working paper, 1018-5941 ; WP/99/99 |
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IMF working paper ; WP/99/99.
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| Summary |
This paper seeks to determine whether firm level investment behavior in the manufacturing sectors of Cameroon, Ghana, Kenya, Zambia and Zimbabwe is more accurately described by standard theory based on quadratic adjustment costs or by alternative models, based on irreversibilities or fixed costs. The importance of this issue stems first from a theoretical perspective, given that the adjustment cost function constitutes one of the cornerstones of the investment equation, and misspecification of adjustment costs is likely to yield a misspecified investment model. Second, empirically, information on the structure and size of adjustment costs is important for understanding how investment responds to changes in fundamentals. For example, some non-quadratic adjustment cost models imply that firm investment is nonlinear: periods of little response to shocks can be followed by intensive responses to both current and accumulated shocks. The structure of adjustment costs also has significant implications for understanding aggregate investment dynamics. 2 |
| Bibliography |
Includes bibliographical references (pages 51-53) |
| Notes |
Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212 MiAaHDL |
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English |
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digitized 2010 HathiTrust Digital Library committed to preserve pda MiAaHDL |
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Print version record |
| Subject |
Manufactures -- Africa -- Econometric models
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Investments -- Africa -- Econometric models
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Investments -- Econometric models
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Manufactures -- Econometric models
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Adjustment Costs.
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African Manufacturing.
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Duration Dependence.
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Fixed Costs.
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Investment Rate.
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Nonparametric Methods.
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Africa
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Cameroon.
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Zimbabwe.
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| Form |
Electronic book
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| Author |
Bigsten, Arne
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International Monetary Fund. Research Department.
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| ISBN |
1281268631 |
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9781281268631 |
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9781451897968 |
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1451897960 |
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1451852258 |
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9781451852257 |
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1462365086 |
|
9781462365081 |
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1452747210 |
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9781452747217 |
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9786613778307 |
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6613778303 |
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