Investment And Exit Decisions At The Plant Level: A Dynamic Programming Approach by Joachim WinterInvestment And Exit Decisions At The Plant Level: A Dynamic Programming Approach by Joachim Winter

Investment And Exit Decisions At The Plant Level: A Dynamic Programming Approach

byJoachim Winter

Paperback

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This book develops a dynamic programming framework for the analysis of firms' joint investment and market exit decisions and reviews methods for econometric estimation of such models. In an empirical application of this framework, a version of this model that allows for financial constraints is estimated by structural methods, using a plant-level dataset for a sample of U.S. firms. The empirical analysis shows that both the plant's productivity and firm-level financial constraints have important effects on plant-level investment and exit decisions. The main contribution of the book to the empirical investment literature is the application of a mixed discrete-continuous Markov process framework to investment and exit decisions, and the structural estimation using a full-information maximum-likelihood method, the nested fixed-point algorithm.
Title:Investment And Exit Decisions At The Plant Level: A Dynamic Programming ApproachFormat:PaperbackDimensions:186 pages, 23.5 × 15.5 × 0.02 in

The following ISBNs are associated with this title:

ISBN - 10:3790811548

ISBN - 13:9783790811544

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Table of Contents

Introduction.- Theroy and Empirics of Investment: A Selective Review of the Literature: Theories of Firm Investment and their Empirical Performance; Firm Investment Under Financial Constraints; Non-standard Constraints and Firm Behavior: A Research Program.- A Dynamic Programming Framework for the Analysis of Firm Decisions: An Introduction to Markov Decision Processes; Strategies for the Econometric Analysis of Dynamic Decision Processes; An Application: Firms'Joint Investment and Exit Decisions.- Plant-level Investment and Exit Decisions and Firm-level Financial Status: Introduction and Overview; Alternative Measures of a Firm's Financial Status; The Empirical Model of Firm Behavior Under Financial Constraints; Description of the Plant-level Dataset; A Reduced-form Model of Plant Growth and Exit; Empirical Results for the Structural Model of Investment and Exit; Summary and Discussion.- Concluding Remarks.