Based on a panel data set of Japanese manufacturing firms in research-intensive industries, we investigate quantitatively the extent to which debt outstandings in the 90s affected the firm’s R&D activities. We find that massive debt outstandings had significantly negative effect on R&D...

We provide a reason for the wider economics profession to take social preferences, a concern for the outcomes achieved by other reference agents, seriously. Although we show that student measures of social preference elicited in an experiment have little external validity when compared to...

A necessary and sufficient condition for an input to be inferior is that, taking into account the input adjustment, an increase of its price raises the marginal productivity of all inputs. Contrary to a widespread opinion, it is not necessary that (some) inputs are rivals (i.e., that some...

This paper investigates theoretically and empirically the endogenous investment decision of firms conditioning on export decision. It shows that theoretically, whatever the form of preferences, firms that start exporting invest more and grow more than the others. However, it is shown that when...

We estimate the effect of demand and price uncertainty on firms' investment decisions from a panel of manufacturing firms. Uncertainty measures are derived from firms' subjective qualitative expectations. They are close to their theoretical counterparts, the variances of future demand and price...

In a neoclassical investment model, returns and investment are linked. We show that the timing of investment and returns are also linked. Conditional on total investment, firms investing earlier in the year have lower returns than firms investing later in the year. We show empirical evidence...

The labor studies literature has for many years accepted the labor hording theory. That theory derives from Journal of Financial Transformation seminal work by Oi (1962), Miller (1971), and Fair (1985). These studies argue that as a result of the absolute cost of hiring and training certain...

This article proposes an identity regarding economic outcomes when producers maximize profits, with free entry and exit of firms. The identity links consumer and producer theory and leads to several results that contribute to understand what should - and should not - be expected under the...

An ECM is derived from first order conditions of a factor demand model. The role of inventory stock in the long run, i.e. a precautionary measure (according to Holt, Modigliani, Muth and Simon (1960)), and/or the role as a production factor (Kydland and Prescott (1982), Christiano (1988)) are...

We consider the testable implications of the Cournot model of market competition. Our approach is nonparametric in that we abstain from imposing any functional specification on market demand and firm cost functions. We derive necessary and sufficient conditions for (reduced form) equilibrium...