While using detailed firm-level data from the private business sector, this study identifies two empirical puzzles: (i) returns-to-scale (RTS) parameter estimates rise at higher levels of data aggregation and (ii) estimates from the firm level suggest decreasing returns to scale. The analysis...

The importance of credit market imperfections for investment behavior is analyzed using Swedish firm level data. Adjustment and agency costs are included in the neoclassical theory of optimal financial and investment decisions for firms. In order to model the possible occurrence of agency costs...

An examination of Swedish manufacturing data on real output and qualitative business tendency survey (BTS) responses from 1968 through 1998 reveals that survey-based attitude data typically improve the fit of simple autoprojective models of manufacturing output growth. It also turns out that...

We construct a model of a firm competing for market share in a customer market and making investments in physical capital. The firm is financially constrained and there are implementation lags in investment. Our model predicts that product prices should depend on costs and competitors' prices...

Price and investment equations are estimated using a unique data set for Swedish manufacturing plants. The empirical specification is based on a theoretical model of a financially constrained firm selling its output in a customer market. We find that, as predicted by our theoretical model,...

Using the method of Caballero and Lyons (1990, 1992), I examine detailed Swedish manufacturing firm-level data on output and factor inputs from 1979 through 1994. Panel regressions show that an increase in aggregate output and inputs appears to raise individual firms’ production beyond private...