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Technological heterogeneity and corporate investment

Author

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  • Dimopoulos, Theodosios
  • Sacchetto, Stefano

Abstract

We propose an importance-sampling procedure to improve the computational performance of the simulated method of moments (SMM) for the estimation of structural models with fixed parameter heterogeneity. The main advantage of the procedure is that it does not require to simulate observations every time that the structural parameters change during the minimization of the SMM criterion function. We illustrate the use of our method by estimating a neoclassical model of investment for a sample of US manufacturing companies, allowing the technological parameters to vary across firms.

Suggested Citation

  • Dimopoulos, Theodosios & Sacchetto, Stefano, 2016. "Technological heterogeneity and corporate investment," Journal of Economic Dynamics and Control, Elsevier, vol. 66(C), pages 20-35.
    • Handle: RePEc:eee:dyncon:v:66:y:2016:i:c:p:20-35
    DOI: 10.1016/j.jedc.2016.02.006
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    Cited by:

    1. Clara Inés Pardo Martínez & Alexander Cotte Poveda, 2022. "The effects of environmental performance on competitiveness and innovation: a stochastic frontier approach for Colombia," Environment Systems and Decisions, Springer, vol. 42(1), pages 51-62, March.
    2. Jia, Fei & Ma, Xiuying & Xu, Xiangyun & Xie, Lijuan, 2020. "The differential role of manufacturing and non-manufacturing TFP growth in economic growth," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 174-183.

    More about this item

    Keywords

    Parameter heterogeneity; Structural estimation; Corporate investment;
    All these keywords.

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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