| This dissertation contains two essays that have two common elements: they address special aspects of physical capital equipment in the manufacturing sector, and they employ longitudinal, plant level data to tests their hypotheses. The first essay examines the fundamental relationship between asset age and asset efficiency while the second essay examines asset choice.;The first essay presents a methodology that estimates capital efficiency schedules by inserting a parameterized investment stream into the position of a capital variable in production, cost, or factor demand models. The parameters of the models are then simultaneously estimated with the parameters of the investment stream. The estimates reveal how the efficiency of capital goods evolve as they age.;The second essay examines the causes of observed heterogeneity in energy technology for a large sample of manufacturing plants. Manufacturing plants possess equipment capable of consuming a single fuel or equipment capable of consuming multiple fuels. The variables in the model are bifurcated into plant specific characteristics and energy market conditions.;These essays exploit a rich manufacturing, plant-level, panel data from the Longitudinal Research Database (LRD), located at the U.S. Bureau of the Census. The LRD contains data on output, labor, and capital, for a large number of establishments over nearly two decades. As the two essays in this dissertation demonstrate, the wealth of information the LRD provides in terms of variables, number of establishments, and time series, provides empirical researchers a tool to test fundamental issues regarding capital in the manufacturing sector. |
