Abstract
We study firm-level expansionary investment activities in both equipment and buildings—the so-called investment spikes. Our identification strategy decomposes firm investment spikes into three streams: a spike in equipment only, buildings only, or a simultaneous spike. Empirically, we find that the timing and size of investment in equipment and buildings are not independent. Firms conducting a simultaneous spike enhance firm scale more than in the case of a spike in equipment or buildings alone. Employment growth occurs when a firm builds structures. Investment in equipment affects the optimal input mix and high productivity in equipment and buildings provides investment timing signals. In low-tech sectors firm production growth depends on investment in buildings. In contrast, a necessary condition for firms in high-tech sectors to grow their production is investment in equipment.keywordsinvestment spikesequipmentbuildingsinterrelationscaleproductivityinput mixefficiencylow- and high-techlabour intensity.
Original language | English |
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Title of host publication | Advances in Efficiency and Productivity Analysis |
Editors | Christopher Parmeter, Robin Sickles |
Place of Publication | Switzerland |
Publisher | Springer International Publishing |
Pages | 303-333 |
Volume | NAPW 2018 |
ISBN (Electronic) | 978-3-030-47106-4 |
ISBN (Print) | 978-3-030-47106-4 |
DOIs | |
Publication status | Published - 2020 |
Keywords
- investment spikes
- equipment
- buildings
- interrelation
- scale
- productivity
- input mix
- efficiency
- low- and high-tech
- labour intensity