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Simultaneity represents a fundamental problem when estimating the elasticity of substitution between capital and labour. To overcome this problem, a wide variety of external instruments has been applied in the literature. However, the use of instruments may lead to wrong inference if they are...
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In our analysis we discuss several dynamic panel data estimators proposed in the literature and assess their … same conclusions concerning the investment behaviour of German manufacturing firms based on the Deutsche Bundesbank …'s Corporate Balance Sheet Statistics. Investment is strongly positive dependent on lagged investment and Q. Nevertheless, in …
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We analyse empirically the effect of uncertainty on fixed investment based on a panel data set of Japanese …, exerts a significantly negative effect on investment irrespective of the statistical methods chosen. We also find that this … negative relationship between investment and uncertainty is closely related to the degree of irreversibility of capital …
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