IDEAS home Printed from https://ideas.repec.org/a/oup/ajagec/v72y1990i2p298-308..html
   My bibliography  Save this article

An Adjustment-Cost Rationalization of Asset Fixity Theory

Author

Listed:
  • Shih-Hsun Hsu
  • Ching-Cheng Chang

Abstract

This article integrates a classic concept in production economics (G. L. Johnson's asset fixity theory) with the dynamic adjustment cost model. Until now the literature has considered these two to be incompatible. By relaxing the smoothness assumption of the adjustment cost function at the origin, the theory of costs of adjustment can provide a rigorous endogenization of asset fixity. G. L. Johnson and Edwards' results are then obtained when the linearity assumption of the adjustment cost function is imposed. The work reported here also indicates that both smoothness at the origin and symmetry of adjustment cost function should be subject to empirical tests.

Suggested Citation

  • Shih-Hsun Hsu & Ching-Cheng Chang, 1990. "An Adjustment-Cost Rationalization of Asset Fixity Theory," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(2), pages 298-308.
    • Handle: RePEc:oup:ajagec:v:72:y:1990:i:2:p:298-308.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2307/1242333
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jakob Vesterlund Olsen & Arne Henningsen, 2011. "Investment Utilisation, Adjustment Costs, and Technical Efficiency in Danish Pig Farms," IFRO Working Paper 2011/13, University of Copenhagen, Department of Food and Resource Economics.
    2. Witzke, H.-P. & Heckelei, T., 1997. "Adjustment Cost and Partial Adjustment Models for German Agriculture," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 33.
    3. Williams, John & McSweeney, Peter & Salmon, Robert, 2014. "Australian Farm Investment: Domestic and Overseas Issues," Papers 234408, University of Melbourne, Melbourne School of Land and Environment.
    4. Oude Lansink, Alfons G.J.M. & Pietola, Kyosti, 2002. "Semi-Parametric Modeling of Investments in Energy Installations," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24813, European Association of Agricultural Economists.
    5. Lin, Ni & Shumway, C. Richard, 2000. "Asset Fixity In U.S. Agriculture: Robustness To Functional Form," Ag Econ Series 12967, Washington State University, School of Economic Sciences.
    6. Claassen, Roger & Tegene, Abebayehu, 1999. "Agricultural Land Use Choice: A Discrete Choice Approach," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 28(1), pages 1-11, April.
    7. Richards, Timothy J., 1996. "Economic Hysteresis And The Effects Of Output Regulation," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 21(1), pages 1-17, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:ajagec:v:72:y:1990:i:2:p:298-308.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.