General Method of Moments (GMM) estimation of a linear one-equation model using panel data with errors-in-variables is considered. To eliminate fixed individual heterogeneity, the equation is differenced across one or more than one periods and estimated by means of instrumental variables. With...

We use the Stock and Wise approximation of stochastic dynamic programming in order to identify the extent to which profitability can explain exit behavior. In our econometric model, heterogeneous firms engage in Bertrand (price) competition. Firms produce heterogeneous products, using labor,...

We develop an econometric model for firm exit, using stochastic dynamic programming (SDP) as a starting point. According to SDP, the value of an operating firm can be written as the sum of (i) the net present value of continuing production if the firm is committed to a future exit date, and (ii)...

How do firms differ, and why do they differ even within narrowly defined industries? Using evidence from six high-tech, manufacturing industries covering a 24-year period, we show that differences in sales, materials, labor costs and capital across firms can largely be summarized by a single,...

How do firms differ, and why do they differ even within narrowly defined industries? Using evidence from a new panel data set for four high-tech, manufacturing industries covering a 10-year period, we show how differences in sales, materials, labor costs and capital across firms can be...

A behavioural model of crime is developed and applied to panel data on the number of crimes and clear-ups for the 53 police districts in Norway for the period 1970-78. Data on both total crime and on 12 different types of crime is employed. The model consists of behavioural relations of the...

While little attention has been paid to the role of profitability in the empirical literature on firm exit, we employ a detailed recently established database of Norwegian manufacturing firms to identify the extent to which profitability explains a firm's exit behavior. Some key characteristics...

This paper discusses identification, estimation and testing in panel data models with attrition. We focus on a situation which often occurs in the analysis of firms: Attrition (exit) is endogenous and depends on the outcomes of an observed stochastic process and the interest-parameters...

This paper discusses how specification of probabilistic models for multistate duration data generated by individual choices should be justified on a priori theoretical grounds. Preferences are assumed represented by random utilities, where utilities are viewed as random also to the agent...

We consider testing for long-run homogeneity within a dynamic consumer demand system allowing for non-stationarities. The static long-run solution is assumed to follow the Linear Almost Ideal Demand System and we test for long-run homogeneity within this system utilizing a triangular...