Exit dynamics with rational expectations
Working paper
![Thumbnail](/ssb-xmlui/bitstream/handle/11250/180033/dp291.pdf.jpg?sequence=5&isAllowed=y)
Åpne
Permanent lenke
http://hdl.handle.net/11250/180033Utgivelsesdato
2000Metadata
Vis full innførselSamlinger
- Discussion Papers [1004]
Sammendrag
Abstract:
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) the value of the exit option. By approximating the option value by a simple function of its determinants, we derive an expression for the distribution of firm exit probabilities. The model is estimated by pseudo likelihood methods using panel data from the Norwegian Manufacturing Statistics. The applicability of the model is illustrated by assessing to what extent quotas on emissions of carbondioxide increase exits in manufacturing sectors.
Keywords: Exit dynamics, stochastic dynamic programming, option value, pseudo likelihood, dynamic panel data, random effects, environmental taxes
Utgiver
Statistics Norway, Research DepartmentSerie
Discussion Papers;No. 291Beslektede innførsler
Viser innførsler beslektet ved tittel, forfatter og emneord.
-
The impacts of alternative policy instruments on environmental performance. A firm level study of temporary and persistent effects
Bye, Brita; Klemetsen, Marit Elisabeth (Discussion papers;788, Working paper, 2014-10)We study the effects of various environmental regulations on environmental performance measured as emission intensity. Moreover, we aim to test whether any such effects are persistent or only temporary. Conventional theory ... -
The welfare effects of carbon policies: grandfathered quotas versus differentiated taxes
Bye, Brita; Nyborg, Karine (Discussion Papers;No. 261, Working paper, 1999)Recently, it has been demonstrated that pre-existing distortionary taxes can substantially increase the costs of market-based instruments which do not raise revenue, such as non-auctioned emissions quotas. Revenue-raising ... -
Labour market rigidities and environmental tax reforms : welfare effects of different regimes
Bye, Brita (Discussion Papers;No. 242, Working paper, 1998)The working of the labour market is important for the total welfare effects of tax reforms. This paper analyses, by using a computable general equilibrium model for the Norwegian economy, how different assumptions about ...