Depreciation Rates in a Transition Economy: Evidence from Czech Panel Data

CERGE-EI Working Paper Series 137

26 Pages Posted: 21 Apr 1999

See all articles by Lubomir Lizal

Lubomir Lizal

Czech Technical University - Faculty of Electrical Engineering; Anglo-American University; Charles University in Prague - CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences

Multiple version iconThere are 2 versions of this paper

Date Written: December 1998

Abstract

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.

JEL Classification: C23, D21, G31, K34, M4, P11

Suggested Citation

Lizal, Lubomir, Depreciation Rates in a Transition Economy: Evidence from Czech Panel Data (December 1998). CERGE-EI Working Paper Series 137, Available at SSRN: https://ssrn.com/abstract=154628 or http://dx.doi.org/10.2139/ssrn.154628

Lubomir Lizal (Contact Author)

Czech Technical University - Faculty of Electrical Engineering ( email )

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Anglo-American University ( email )

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