TY  - RPRT
        AU  - Asphjell, Magne Krogstad
AU  - Letterie, Wilko
AU  - Nilsen, Øivind Anti
AU  - Pfann, Gerard A.
        TI  - Sequentiality versus Simultaneity: Interrelated Factor Demand
        PY  - 2010/Dec/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 5359
        UR  - https://www.iza.org/publications/dp5359
        AB  - A structural model is developed and estimated by a maximum likelihood routine to investigate interrelated factor demand subject to nonconvex adjustment costs. The dataset concerns Norwegian plants operating in manufacturing industries and it covers the period 1993-2005. The estimates indicate that it is advantageous to adjust the stock of labour and capital simultaneously. The cost advantage of simultaneous changes is small for capital but is large for labour. The empirical results suggest that when estimating separate factor demand models the bias of parameter estimates is most severe in case of labour demand.
        KW  - nonconvex adjustment costs
KW  - interrelation
KW  - capital
KW  - labour
KW  - factor demand
        ER  -