Level Of Capital Investment Research Articles

Development Impact Fees and the Acquisition of Infrastructure

This article considers the impact that the use of impact development fees has on the level of capital investment made by local governments in the United States. Using a sample of 85 cities, we find that the use of fees is associated with lower levels of capital spending. The data also reveal that the debt-to-expenditure ratio for these cities is associated with higher levels of capital spending, leading us to conclude that fees act as a quasi-pricing mechanism regulating the amount of capital investment demanded by developers.

Human Capital Formation and General Equilibrium Treatment Effects: A Study of Tax and Tuition Policy

AbstractPolicies to promote human capital formation have been advocated as a remedy for reducing the economy‐wide problem of rising wage inequality. These policies are national in character and are designed to substantially alter the proportion of the work‐force that is skilled. Yet the methods used to evaluate these policies are partial equilibrium in nature and do not take account of the consequences of the changes in skill prices that are produced by the policies.This paper summarises our research on general equilibrium evaluation of tuition and tax policies. We compare estimates of policy impact from our approach with those obtained from conventional partial equilibrium ‘treatment effect’ approaches to policy evaluation, and find substantial differences. Conventional partial equilibrium approaches present an overly optimistic view of what tax and tuition policy can achieve because they ignore the change in human capital investment levels induced by the change in prices due to the policy. In addition, conventional partial equilibrium approaches fail to provide an accurate assessment of the welfare consequences of these policies.

The Forest Sector of the Russian Far East

Two specialists on the forest industry of the Russian Federation examine the balance between supply and demand for forest products within the Russian Far East in a survey of the region's forest resources. The focus is on the extent to which the resource is utilized relative to its potential, the ways in which it is processed, and the current level of exports. Forecasts are presented of longer-term economic harvest levels, estimated domestic demand for the region's wood fiber, net import-export balance, and requisite levels of capital investment. Coverage includes an assessment of contrasting prospects for forest-in-dustry development in the region's “northerntier” and “southerntier” (oblast/kray-level) subdivisions. Journal of Economic Literature, Classification Numbers: L73, O18, Q23, R58. 8 tables, 45 references.

A study of the growth-investment-financing nexus of the major UK construction groups

This paper compares the relationship between growth, investment and financing of the contracting operations with that of the housebuilding operations in the large, diversified UK construction groups during the 1980s. A graphical presentation of a financial analysis of the contracting and housebuilding divisions' company accounts illustrates significant changes in the levels of capital investment and the sources and uses of finance of these two activities during a period of marked growth in turnover. It is established that the major contractors not only achieved significant growth in their turnover with negligible recourse to additional capital investment but in fact generated surplus funds which could be diverted into other businesses in their respective construction group's portfolio of business activities. It is shown that their ‘cash-requiring’ speculative housebuilding businesses relied on such intra-group funds as a main source of finance for investment in land during the 1980s.

Export‐share requirements, content protection and the multinational firm under production uncertainty

Analyses the influence of export share and domestic content policies on the level of capital investment undertaken by a multinational firm both in its home country and in the foreign country in which it operates. These protective policies, in force in both developing and industrialized countries, require the firm to employ a certain proportion of inputs from the foreign country in which it operates and to export a certain proportion of its output abroad. Cases examined in the analysis include those for which the firm faces uncertainty in the production process in the host and home countries; and in neither country. Finds that both of these policies can have spillover effects to the home country as well, i.e. when there is uncertainty in production in the home country, these policies can reduce the optimal level of investment in the home country, too.

Discussion of Centralization, Delegation, and Shared Responsibility in the Assignment of Capital Investment Decision Rights

Baiman and Rajan use the joint forces of relationship-specific investment and incomplete contracting to model a principal's choice between a centralized organization, where he decides the level of investment in a capital asset, and a decentralized organization, where those decision rights are contractually assigned to the agent. When contract incompleteness prevents the principal from committing to a level of capital investment, his ex post incentive to underinvest in the capital asset causes an inefficient mix of capital and labor. The principal can eliminate the inefficiency resulting from his own opportunistic behavior by assigning the capital investment decision to the agent, but the agent will overinvest in the capital asset in order to reduce his personal cost of effort when he is given the decision rights. As a result, the principal's centralizationdelegation choice is essentially a choice between the inefficiency resulting from the principal's opportunistic underinvestment of capital and the inefficiency resulting from the agent's incentive to minimize his effort by overinvesting in capital. Some type of contract incompleteness is necessary for the organizational form to matter. Baiman and Rajan assume that the agent's compensation cannot depend on the realization of a state variable, 0, which determines the efficient mix of capital and labor. However, the agent

Sustainability in Chinese agriculture: challenge and hope

Based upon a framework of three (i.e. biophysical, sociopolitical and techno-economic) dimensions of sustainability in agriculture, this paper discusses the current situation of Chinese agriculture in relation to sustainability. The main challenges are population pressure, land degradation, environmental pollution, global climate change, non-agricultural activities, market uncertainty, low level of capital investment, and some policy and behavioural conditions. However, there are opportunities related to natural resources, labour, education, science and technology, and some models of sustainable farming which already exist.

Allocating oil leases: Overcapitalization in licensing systems based on size of work programme

Discretionary systems of awarding exploration and production licences, such as that on the UK continental shelf, often use the size of proposed work programmes as an important criterion. This paper models the effect of strategic considerations on the choice of work programme in such licensing systems. The model incorporates uncertainty about resource size and about the work programmes proposed by competing companies. It is found that competition between bidders results in a level of capital investment which exceeds the profit maximizing allocation. It is concluded that licensing systems which emphasize size of work programme can result in strategic but wasteful overcapitalization.

The effect of defense program uncertainty on cost, schedule, and capital investment

Program instability, low levels of capital investment and uneconomical production rates have been recognized as significant problems in defense acquisition programs. In this paper, we use a dynamic programming model under uncertainty to investigate the relations among these problems. We show that capital investment and production rates that appear to be too low may be the result of cost minimizing responses by contractors to program instability. Attempts to change the level of capital investment or production rate on defense programs without regard to the nature of program instability may hinder efficient resource allocation.

The development of India's mining industry

This paper evaluates the development of India's mining industry, its present status and future outlook. Despite its growth, the contribution of India's mining industry to GDP has remained relatively stable since 1970. At present the nation is a leading world producer of 11 major mineral and energy commodities, including bauxite, chromite, coal, iron ore and manganese. Recent economic reforms have stimulated industrial expansion in India; however, problems, including a restricted private sector role in resource development and ineffective government mineral strategies, may limit future growth in output. Capital investment levels in India's mining industry are examined in the paper to assess possible long-term expansion levels.

TYPES OF AGRICULTURAL LAND USE IN MOSCOW OBLAST

A study of basic types of agricultural land use in Moscow Oblast regionalizes oblast agriculture according to a series of indices representing land use intensity and productivity: level of capital investment, intensity of fertilizer application, crop rotation schemes, mean farm size, percent of arable land, and number of farm workers. The categories identified ranged from a zone of intensive commercial livestock-feeding and hothouse operations, for the most part lying within or inside the greenbelt of the city, to space-extensive livestock breeding operations along the western and southwestern edges of the oblast having a very small proportion of marketable output (translated by Andrew R. Bond).

Foreign direct investment with unemployment and endogenous taxes and tariffs

It is well known that high tariffs can induce foreign direct investment or ‘tariff jumping’. This paper analyzes tariff jumping in the context of a host government which can set specific tariffs and taxes subject to the credibility constraint that the chosen levels be optimal once capital is irreversibly in place. The foreign multinational is assumed to choose its location and level of investment strategically, taking into account the induced tax and tariff levels. In the presence of unemployment, the optimal tariff exceeds the optimal tax for any given level of capital investment, leading to foreign direct investment.

The Relationship between the Level of Capital Expenditures and Firm Value

When a firm's management needs to raise external capital in order to finance an investment project, it is likely to have better information about the project's future return than do potential investors. In such a case, as has been shown in the literature, management may be able to signal its information through the use of certain financial variables. However, the possibility that management may be able to use the level of investment in the project itself to signal their information has not been considered. The purpose of this paper is to examine this possibility. It is shown here that the level of capital investment may be able to perfectly reveal management's information, with a higher input level signalling more favorable information. It is further demonstrated that even in this equilibrium, financial variables still play an important role. Among other results, it is shown, in contrast to a conclusion of a study by Leland and Pyle, that in this setting the number of shares held by management may be negatively correlated with the favorableness of their information.

Expectations of the U.S. Specialty Steel Industry

In the United States, the specialty steel industry represents about two percent of the tonnage, and 10 percent of the sales volume of our country's entire steel industry. At present, the U.S. specialty steel industry is a modern, cost competitive, and high technology sector of the steel industry. This fact is generally recognized throughout the world. The competitiveness of our industry is no accident. It is a direct result of productivity improvements and efficiencies obtained through highly trained, dedicated workers, a sustained high level of capital investment, and research and development over the years. In 1984, the specialty steel industry spent $146 million in capital investment. The investment in 1985 should top that amount-a great deal for an industry this size. Research and development efforts are likewise very strong. R&D expenditures range from 1 V2 to 2112 percent of sales, for most producers. That's three to five times the commitment of the steel industry as a whole. These continuing research and development efforts have kept American processing capabilities up-to-date and as modern as any specialty steel producers in the world. Almost all stainless steels for flat rolled products are now continuously cast and some companies have achieved continuous casting ratios of 90 to 100 percent. Stainless billets and some tool steels and electrical alloys are also being continuously cast. Argon/oxygen decarburization, vacuum/oxygen decarburization, or ladle refining techniques are used in producing most specialty steels in the United States. In no other country in the world is there an equal array of vacuum induction, vacuum arc and electroslag remelting equipment for producing new quality levels in special purpose alloys for high technology applications like gas turbine engines, special tool steels and some electrical alloys. You will also

Picking from the Management Tree

What differentiates one company from another is not its level of capital investment, the complexity of its computer system or the amount spent on advertising. It is the people who manage these, and the many other factors that are critical to achieving commercial excellence. The author explains why companies of all sizes are turning to “critical path” selection to locate the management excellence needed to stay ahead of the competition.

Optimal Fisheries Investment: Comparative Dynamics for a Deterministic Seasonal Fishery

A dynamic fisheries model is developed to simultaneously optimize investment in the resource stock (the fish) and investment in the capital stock (the fleet). Each of these investment problems faces a major complication; investment in the resource is constrained by the natural population dynamics, while investment in the physical capital stock tends to be irreversible because capital used in natural resource industries is often nonmalleable. The model assumes a seasonal fishery in which annual escapement and capital investment levels can be controlled. A dynamic programming approach is used to analyze the model heuristically and numerically. The comparative dynamics of optimal investment strategies are studied, with regard to (i) delays in investment, (ii) population dynamics parameters, (iii) fish price, (iv) capital cost, (v) depreciation rate, and (vi) discount rate. In particular, the depreciation rate and the ratio of unit capital costs to unit operating costs play interesting and complex roles in determining optimal investment levels.

Identification and Estimation Issues for a Causal Earnings Model

In this paper, I postulate a causal, or structural, model of corporate earnings and present a theoretical analysis of various empirical issues related to the identification and estimation of time-series earnings models.' The postulated model describing corporate earnings is derived endogenously by specifying a model of the firm's production and invest ment structure and its inventory accounting rule. The main characteristic of this model is that the firm uses linear stochastic decision rules to determine its production, inventory, and capital investment levels. Such decision rules are frequently postulated in the economics literature. Using the theoretical properties of the derived earnings model, I then address estimation and forecasting issues in a general manner without actually doing the estimation. Starting with Dopuch and Watts [1972], much of the empirical research in accounting on the structural (i.e., time-series) properties of earnings numbers has first postulated a linear, stochastic, time-series model as the underlying earnings-generating process, and then identified and estimated the model using a sample of realized earnings numbers. These accounting studies usually have the goal of estimating an expectation model to generate expected or forecasted earnings. This type of end

Inflation and its impact on investment decisions in the hospitality industry

The impact of inflation is more severe in the hospitality industry than in some others because of its high level of capital investment. Proper evaluation of investment returns can only be made if inflation is considered in the evaluation process. This article presents an approach based on the net present value method of investment evaluation which incorporates the anticipated level of inflation and provides for the uncertainties of future cash flows.

Monitoring the Three-Dimensional Position and Three-Axis Rotation of Submerged Structures

Monitoring the Three-Dimensional Position and Three-Axis Rotation Position and Three-Axis Rotation of Submerged Structures Summary During many subsea structure installations, the knowledge of x, y, and z coordinates is not sufficient. There is an additional need to appreciate spatial attitude-i.e., pitch, roll, and yaw. This paper describes equipment and methods for continually measuring each of these parameters underwater and presenting them in an ergonomic format to a presenting them in an ergonomic format to a controller at the surface. Introduction A submerged object generally is subjected to a system of nonconcurrent spatial forces (water currents, weight, buoyancy, etc). From the laws of mechanics, these forces can be expressed in terms of a single resultant force and a single resultant couple. The consequent motion induced is, therefore, a combination of translation and rotation.Most existing navigation and survey equipment measure translation - i.e., a relative component of motion vs. a fixed reference system. Strictly speaking, the fixed system in Newtonian physics is the primary inertial system, which is assumed to have no motion in space. For engineering applications, however a set of axes attached to the surface of the earth usually is taken. These axes translate as a local frame to which velocity or acceleration can be referred.A position fix underwater can be related directly to a static surface or subsea datum. Alternatively, it can be related indirectly by means of a moving system which itself is positioned with respect to such a datum. Much commercial equipment is available to provide underwater position vs. either reference, but provide underwater position vs. either reference, but very few can determine rotation of the local frame.A survey package to monitor translation and rotation of a submerged structure can be configured in a variety of ways -with substantial differences in measurement technique, accuracy, redundancy, and complexity. The approach described in this paper has been proved on several projects in the North Sea and offshore Brazil. Requirement Recent years have seen increasing numbers of subsea installations despite difficulties experienced with the new technology involved. By far the majority of such installations have been associated with hydrocarbon exploitation, particularly in the marginal and deepwater offshore fields.Such structures as satellite wells eliminate the problems of directional drilling, and subsea problems of directional drilling, and subsea templates can facilitate earlier production than the conventional drilling platform approach. Cost effectiveness and performance of units now operating establishes the subsea completion as a viable proposition. proposition. In general, as the development of an offshore field progresses, the positioning requirement becomes progresses, the positioning requirement becomes more demanding. In deeper water, the increased risk and level of capital investment by operators calls for more precise control. On the other hand, the sensors (as risk items) should be relatively inexpensive.Broadly, the sensor requirement during installations is to provide survey data to enable movement control of the submerged structure. Typical sensor output specifications are shown in Fig. 1. Positioning demands vary between + 10 and0.5 m, with rotation normally within 0.5 degrees. What often is left unqualified, however, is the reference to which such measurements are to be made.An example of current field development projects requiring this type of monitoring is the positioning of a steel platform jacket of 18,000 DWT over a drilling template in 150 m of water. JPT P. 1557

Corporate organization and manufacturing branch plant closures in non-metropolitan areas

Erickson R. A. (1980) Corporate organization and manufacturing branch plant closures in non-metropolitan areas, Reg. Studies 14, 491–501. The establishment of branch plants in non-metropolitan areas by metropolitan-based corporations has substantially increased manufacturing employment in many of the former regions. However, there has been speculation that, because branch plants are relatively easy to establish, corporations would be likely to close such plants in the event of recession or operating difficulties of the organization. Data on the performance of a large set of plants in non-metropolitan Wisconsin indicate that such branches are far less likely to close than establishments in general. This paper also examines the influences of alternative corporate organizational structures and related plant interdependencies, market environments, levels of capital investment, and acquisition on branch plant closure rates.