Arbeitspapier
Internal Adjustment Costs of Firm-Specific Factors and the Neoclassical Theory of the Firm
This paper considers the consequences of a two-sector vertically-integrated model of firms producing output using firm-specific capital with a second sector producing firm-specific capital by adapting raw capital purchased in the market. Analysts rarely observe each sector separately. Aggregating over both sectors produces short-run and long-run factor demand functions that appear to be perverse, but when disaggregated obey standard neoclassical properties. Adjustment costs create the appearance of static inefficiency in the presence of dynamic efficiency.
- Language
-
Englisch
- Bibliographic citation
-
Series: IZA Discussion Papers ; No. 15744
- Classification
-
Wirtschaft
Firm Behavior: Theory
Production, Pricing, and Market Structure; Size Distribution of Firms
General Aggregative Models: Neoclassical
- Subject
-
adjustment costs
factor demand
frontier production theory
firm-specific capital
- Event
-
Geistige Schöpfung
- (who)
-
Chetty, V. K.
Heckman, James J.
- Event
-
Veröffentlichung
- (who)
-
Institute of Labor Economics (IZA)
- (where)
-
Bonn
- (when)
-
2022
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Chetty, V. K.
- Heckman, James J.
- Institute of Labor Economics (IZA)
Time of origin
- 2022
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