Modeling and measuring organization capital

Andrew Atkeson, Patrick J. Kehoe

Research output: Contribution to journalArticle

126 Citations (Scopus)

Abstract

Manufacturing plants have a clear life cycle: they are born small, grow substantially with age, and eventually die. Economists have long thought that this life cycle is driven by organization capital, the accumulation of plant-specific knowledge. The location of plants in the life cycle determines the size of the payments, or organization rents, plant owners receive from organization capital. These payments are compensation for the interest cost to plant owners of waiting for their plants to grow. We use a quantitative growth model of the life cycle of plants, along with U.S. data, to infer the overall size of these payments.

Original languageEnglish (US)
Pages (from-to)1026-1053
Number of pages28
JournalJournal of Political Economy
Volume113
Issue number5
DOIs
StatePublished - Oct 1 2005

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Life cycle
Modeling
Payment
Owners
Economists
Costs
Rent
Manufacturing
Growth model

Cite this

Modeling and measuring organization capital. / Atkeson, Andrew; Kehoe, Patrick J.

In: Journal of Political Economy, Vol. 113, No. 5, 01.10.2005, p. 1026-1053.

Research output: Contribution to journalArticle

Atkeson, Andrew ; Kehoe, Patrick J. / Modeling and measuring organization capital. In: Journal of Political Economy. 2005 ; Vol. 113, No. 5. pp. 1026-1053.
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