Detecting Endogenous Effects by Aggregate Distributions: A case of Lumpy Investments
Lai, Chaoqun;Makoto Nirei
WP#09-03 Hitotsubashi University IIR (2009/05)
This paper studies the effect of strategic complementarity among firms' lumpy investments on the fluctuations of aggregate investments. We investigate an extensive panel data set on Italian manufacturing firms. We first show that the fraction of firms that experience a large investment rate in a region-year is distributed exponentially…