1,720,998 research outputs found
Maximum likelihood estimation of input demand models with fixed costs of adjustment
No full textTraditional models of input demand rely upon convex and symmetric adjustment costs. However, the fortune of this highly restrictive approach is due more to analytical convenience than to empirical relevance. In this note we examine the model under more realistic hypothesis of fixed costs, show that it can be cast in the form of a Double Censored Random Effect TobitModel, derive its likelihood function, and finally evaluate the performance of theML estimators through aMonte Carlo experiment. The performances, although strongly dependent on the degree of censoring, appear to be promisin
The impact of submarket concentration in the US pharmaceutical industry in 1987-1998
Full text linkGlobal market concentration is the result of the interplay of different sub-markets. According to this view, empirical analysis on the role of concentration as an incentive or as a barrier to entry must be conducted on a sub-market level, where the sub-markets are identified as specific technological trajectories. In this paper we investigate the role of 3-digit submarket concentration in the US pharmaceutical sector in 1987-1998. We take into account several sources of potential entry deterrence including the relative company size to the largest incumbent firm and the number of competing products in each submarket. The estimates of a panel logit model show that a concentrated industry at submarket level seems to act like a barrier to entry. The relative company size is not significant while the number of competing products is significantly positiv
A Panel Cointegration study of the long-run relationship between Savings and Investments in the OECD economies, 1970-2007
Full text linkIn this paper we test for the existence of a long-run savings-investments relationship in 18 OECD economies over the period 1970-2007. Although individual modelling provides only very weak support to the hypothesis of a link between savings and investments, this cannot be ruled out as individual time series tests may have low power. We thus construct a new bootstrap test for panel cointegration robust to short- and long-run dependence across units. Thid test provides evidence of a long-run savings-investments relationship in about half of the OECD economies
examined. The elasticities are however often smaller than 1, the value expected under no capital
movements
A residual-based bootstrap test for panel cointegration
No full textWe address the issue of panel cointegration testing in dependent panels, showing by simulations that tests based on the stationary bootstrap deliver good size and power performances even with small time and cross-section sample sizes and allowing for a break at a known date. They can thus be an empirically important alternative to asymptotic methods based on the estimation of common factors. Potential extensions include test for cointegration allowing for a break in the cointegrating coefficients at an unknown date
A Panel Cointegration study of the long-run relationship between Savings and Investments in the OECD economies, 1970-2007
No full textIn this paper we test for the existence of a stable long-run savings– investments relationship in 18OECDeconomies over the period 1970–2007. Although individual modelling provides only very weak support to the hypothesis of a link between savings and investments, this cannot be ruled out as individual time series tests may have low power.We thus construct a new bootstrap test for panel cointegration robust to short- and long-run dependence across units. This test provides evidence of a long-run savings–investments relationship in most of the countries, with USA the most notable exception. However, the elasticities generally smaller than 1 suggest that market imperfections mostly cause only partial home biases
Savings and investments in the OECD, 1970-2007: A test of panel cointegration with regime changes
No full textIn this paper we test for the existence of a long-run relationship between investment and savings (the Feldstein-Horioka puzzle) in a panel of 18 OECD countries, 1970-2007, allowing for heterogenous breaks in the coefficients. For this purpose we develop a bootstrap panel cointegration with breaks robust to cross-section dependence, shown by simulation to enjoy good size and power properties provided that some care is applied in its use. The tests suggest that, even allowing for parameter shifts in the countries where capital control regulations changed in the sample period, there is no evidence of an investment-savings long-run relationship for the panel as a whole. (C) 2014 Elsevier Inc. All rights reserved
Testing for Breaks in Cointegrated Panels - with an Application to the Feldstein-Horioka Puzzle
Full text linkStability tests for cointegrating coefficients are known to have very low power with small to medium sample sizes. In this paper we propose to solve this problem by extending the tests to dependent cointegrated panels through the stationary bootstrap. Simulation evidence shows that the proposed panel tests improve considerably on asymptotic tests applied to individual series. As an empirical illustration we examined investment and saving for a panel of 14 European countries over the 1960-2002 period. While the individual stability tests, contrary to expectations and graphical evidence, in almost all cases do not reject the null of stability, the bootstrap panel tests lead to the more plausible conclusion that the long-run relationship between these two variables is likely to have undergone a break
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