Investment and exit decisions at the plant level. A dynamic programming approach (Q1977409)

The contents of the book is the following. 1. Introduction. 2. Theory and empirics of investment: a selective review of the literature. There are references to non-standard and financial constraints and a review of the research program for the structural empirical analysis of firm behavior in this chapter. 3. A dynamic programming framework for the analysis of firm decisions. In particular, the author solves numerically the Bellmann equation \[ V(y,z)=\max_{a\in A(y,z)}[u(y,z,a)+b\int V(g(y,a,z,z'),z')q(dz'|z) \] by successive approximation and Newton-Kantorovich iterations. 4. Plant-level investment and exit decision and firm-level financial status. 5. Concluding remarks.