Displaced Capital
A Study of Aerospace Plant Closings
Bibliographic Data
| ID | 10179880 |
|---|---|
| Authors | Valerie A Ramey, Valerie Ramey (University of California San Diego), Matthew D Shapiro (0000-0003-3435-7932, University of California San Diego) |
| Year | 2001 |
| Volume | 109 |
| Issue | 5 |
| Pages | 958-992 |
| Publication date | 2001-10-01 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | Journal of Political Economy (JOURNAL) |
| Journal identifiers | ISSN: 0022-3808 • E-ISSN: 1537-534X |
| Publisher | University of Chicago Press (PUBLISHER • US) |
| DOI | 10.1086/322828 |
| OpenAlex | W1969341825 |
| Language | EN |
| Citations received | 30 |
| References cited | 18 |
Using equipment-level data from aerospace plants that closed during the 1990s, this paper studies the process of moving installed physical capital to a new use. The analysis yields three results that suggest significant sectoral specificity of physical capital and substantial costs of redeploying the capital. First, other aerospace companies are overrepresented among buyers of the used capital relative to their representation in the market for new investment goods. Second, even after age-related depreciation is taken into account, capital sells for a substantial discount relative to replacement cost; the more specialized the type of capital, the greater the discount. Yet, capital sold to other aerospace firms fetches a higher price than capital sold to industry outsiders. Finally, the process of winding down operations and selling the equipment takes several years
Aerospace · Business · Capital (architecture · Capital formation · Capital good · Capital intensity · Cost of capital · Depreciation (economics · Economic capital · Economics · Financial capital · Fixed capital · Goods and services · Human capital · Industrial organization · Investment (military · Market economy · Monetary economics · Physical capital · Capital Investment and Risk Analysis · Economic Growth and Productivity · Engineering · Fiscal Policy and Economic Growth
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| Unique citing works | 30 |
|---|---|
| Citations per year | 1,25 |
| Citation span | 2002 - 2026 (25) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 30 |