Journal Article

No. 2015-16 | July 02, 2015
Multinational versus National Firms on Capital Adjustment Costs: A Structural Approach PDF Icon

Abstract

This paper provides an alternative 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 4,672 Belgian firms for the period 20032010, permitting him to distinguish the ‘ownership status’ of firms. He considers a dynamic discrete choice model of a general specification of adjustment costs including convex and non-convex components. The author uses the method of simulated moments in order to estimate the structural parameters. His results indicate that multinationals’ affiliates face lower capital adjustment costs than national firms.

JEL Classification

F23 D24 D92 G31

Citation

Athanasios Lapatinas (2015). Multinational versus National Firms on Capital Adjustment Costs: A Structural Approach. Economics: The Open-Access, Open-Assessment E-Journal, 9 (2015-16): 1—22. http://dx.doi.org/10.5018/economics-ejournal.ja.2015-16

Assessment

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