Depreciation Rates in a Transition Economy: Evidence from Czech Panel Data
Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute); Czech National Bank (CNB); University of Michigan at Ann Arbor - The William Davidson Institute
CERGE-EI Working Paper Series 137
This paper examines industrial differences in depreciation rates and the suitability of financial data for a microeconomic analysis. Depreciation is a main source of enterprise investment and serves as a source for replacement of obsolete or used-up capital. The findings on capital structure in this paper are consistent with the common view that heavy industry firms have long-life capital while firms operating in electronics, or light industry as a whole, have a capital structure containing a higher portion of a short-life capital. Also, larger firms are more likely to have a higher portion of long-life capital, like real estate. The last conclusion drawn from this analysis is that certain types of financial data might be highly influenced by seasonal effects which could operate as a measurement error and therefore distort estimates which are sensitive to measurement error.
Number of Pages in PDF File: 26
JEL Classification: C23, D21, G31, K34, M4, P11working papers series
Date posted: April 21, 1999
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