Technological Heterogeneity and Corporate Investment

33 Pages Posted: 3 Jul 2015 Last revised: 28 Feb 2016

See all articles by Theodosios Dimopoulos

Theodosios Dimopoulos

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne); Swiss Finance Institute

Stefano Sacchetto

IESE Business School

Date Written: July 1, 2015

Abstract

We propose an importance-sampling procedure to improve the computational performance of the simulated method of moments (SMM) for the estimation of structural models with fixed parameter heterogeneity. The main advantage of the procedure is that it does not require to simulate observations every time that the structural parameters change during the minimization of the SMM criterion function. We illustrate the use of our method by estimating a neoclassical model of investment for a sample of US manufacturing companies, allowing the technological parameters to vary across firms.

Keywords: Parameter Heterogeneity, Structural Estimation, Corporate Investment

JEL Classification: C15, D92, E22

Suggested Citation

Dimopoulos, Theodosios and Sacchetto, Stefano, Technological Heterogeneity and Corporate Investment (July 1, 2015). Journal of Economic Dynamics and Control, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2625694 or http://dx.doi.org/10.2139/ssrn.2625694

Theodosios Dimopoulos

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne) ( email )

Unil Dorigny, Batiment Internef
Lausanne, 1015
Switzerland
0041 (0) 21 692 33 98 (Phone)

HOME PAGE: http://www.hec.unil.ch/people/tdimopoulos

Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

Stefano Sacchetto (Contact Author)

IESE Business School ( email )

08034 Barcelona
Spain
+34 93 253 6461 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
119
Abstract Views
888
rank
337,501
PlumX Metrics