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Investment Behavior of U.S. Firms Over Heterogenous Capital Goods: A Snapshot

December 2004

Written by: Daniel Wilson

Working Paper Number:

CES-04-19

Abstract

Recent research has indicated that investment in certain capital types, such as computers, has fostered accelerated productivity growth and enabled a fundamental reorganization of the workplace. However, remarkably little is known about the composition of investment at the micro level. This paper takes an important first step in filling this knowledge gap by looking at the newly available micro data from the 1998 Annual Capital Expenditure Survey (ACES), a sample of roughly 30,000 firms drawn from the private, nonfarm economy. The paper establishes a number of stylized facts. Among other things, I find that in contrast to aggregate data the typical firm tends to concentrate its capital expenditures in a very limited number of capital types, though which types are chosen varies greatly from firm to firm. In addition, computers account for a significantly larger share of firms' incremental investment than they do of lumpy investment.

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:
investment, market, economist, macroeconomic, investing, heterogeneity, expenditure, capital, stock, yield, federal, invest

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:
Annual Survey of Manufactures, Center for Economic Studies, Total Factor Productivity, New England County Metropolitan, Bureau of Economic Analysis, National Income and Product Accounts, Federal Reserve Bank, Fabricated Metal Products, Census Bureau Center for Economic Studies, Federal Reserve System

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