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Differing factor adjustment costs across industries: Evidence from Japan

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  • Hirokazu Mizobata

    (Institute of Economic Research, Kyoto University)

Abstract

In this Paper, we use industry data from Japan to examine the joint behavior of investment and hiring. We estimate factor adjustment costs in industries and focus on the industrial difference in such costs. Our analisis reveals that heavy industries such as steel and transport equipment need relatively large adjustment costs. A comparison between the U.S and Japan reveals thet the ratio of labor adjustment costs in total adjustment costs tends to be higher in Japan. Our findings are useful in considering the mechanism of factor adjustment costs.

Suggested Citation

  • Hirokazu Mizobata, 2014. "Differing factor adjustment costs across industries: Evidence from Japan," KIER Working Papers 885, Kyoto University, Institute of Economic Research.
    • Handle: RePEc:kyo:wpaper:885
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    File URL: http://www.kier.kyoto-u.ac.jp/DP/DP885.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    joint estimation of investment and hiring; substitutability; complementarity; industry-level adjustment costs;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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