User Cost Elasticity of Capital Revisited
Bibliographic Data
| ID | 9727256 |
|---|---|
| Authors | Nadja Dwenger (0000-0002-1915-5315, Max Planck Institute for Tax Law and Public Finance Munich, corresponding author) |
| Year | 2014 |
| Volume | 81 |
| Issue | 321 |
| Pages | 161-186 |
| Publication date | 2014-01-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Economica (JOURNAL) |
| Journal identifiers | ISSN: 0013-0427 • E-ISSN: 1468-0335 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/ecca.12054 |
| OpenAlex | W1965884286 |
| Language | EN |
| References cited | 57 |
Researchers still lack consensus about the size of the user cost elasticity of capital. The divergence in prior estimates may have arisen because one of the two strands of research has neglected cointegration among capital, its user costs, and sales. Using German firm‐level panel data, I show that estimating a distributed lag model, prevalent in prior literature, leads to low estimates of the user cost elasticity. Properly accounting for cointegration in an error correction model yields a much larger point estimate of the price elasticity of capital (close to −1). Non‐random sample attrition is found to be relatively unimportant
Cointegration · Cost of capital · Econometrics · Economics · Elasticity (physics) · Incentive · Microeconomics · Price elasticity of demand · Fiscal Policy and Economic Growth · Housing Market and Economics · Monetary Policy and Economic Impact
The econometric analysis of time series
Investment under Uncertainty
Testing for stationarity in heterogeneous panel data
The direct estimation of the equilibrium response in a linear dynamic model
Corporate financing and investment decisions when firms have information that investors do not have
Asymptotic Properties of Least Squares Estimators of Cointegrating Vectors
A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems
Inference for unit roots in dynamic panels where the time dimension is fixed
Unit root tests in panel data
Some Tests of Specification for Panel Data
Another look at the instrumental variable estimation of error-components models
Testing for unit roots in heterogeneous panels
Initial conditions and moment restrictions in dynamic panel data models
The Taxation of Income from Capital
A New Approach to Estimating Production Function Parameters
Small Sample Bias and Adjustment Costs
Investment Behavior and Neo-Classical Theory
Capital-Labor Substitution and Economic Efficiency
Financial Factors and Investment in Belgium, France, Germany, and the United Kingdom
The Taxation of Income from Capital
Monetary and Fiscal Policy in a Growing Economy
Monetary and Fiscal Policy in a Growing Economy
An Econometric Model of Manufacturing Investment in the UK
| Citation velocity | historical |
|---|---|
| Highly cited | No |