Investment Spikes in Dutch Horticulture: An Analysis at Firm and Aggregate Firm Level Over the Period 1975-1999

An intermittent and lumpy pattern of investments is observed in the Dutch horticulture sector: only 16.5% of firms experience of investment spike, but they account for 67.7% of total investment. The objective of this paper is to examine the impact of time-varying and time-invariant variables on the probability of observing an investment spieke. This paper investigates the spells between investment spikes in a discrete-time proportional hazard framework. Duration models were estimated on two data sets: on an unbalanced panel and on a grouped into 10 groups data of Dutch glasshouse firms over the period 1975-1999. Different specifications of the model were estimated. Theoretically based model can sufficiently explain the occurrence of investment spikes. Both models show a 6- year period of investment spikes that is also confirmed for the average firm which exhibits a higher hazard ratio in the 6th, 12-13th and 19-20th years of duration. The presence of investment cycle can demonstrate the long-run policy of firms in presence of non-convex adjustment costs. The panel-data models are augmented with a Gamma distribution to account for unobserved heterogeneity among firms.


Issue Date:
2006
Publication Type:
Conference Paper/ Presentation
Record Identifier:
http://ageconsearch.umn.edu/record/25621
PURL Identifier:
http://purl.umn.edu/25621
Total Pages:
15
JEL Codes:
Q12; D9
Series Statement:
Poster Paper




 Record created 2017-04-01, last modified 2018-01-22

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