The contribution of equipment leasing in the errorcorrection model of investment in machinery and equipment: Evidence from Italy

• Autores: Luca Zanin
• Localización: Applied econometrics and international development, ISSN 1578-4487, Vol. 9, Nº. 2, 2009, págs. 87-96
• Idioma: inglés
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• Resumen

  • Several studies have shown a positive correlation between investment in machinery and equipment (M&E) and economic growth. For this reason, it is very important for policymakers to study the dynamics of investments and their expected evolution over time through forecast scenarios. The paper aims to present an error-correction model of investment in machinery and equipment at current price with a focus on the contribution of equipment leasing. The main empirical results of the model with equipment leasing as exogenous show that the variable explains 96% of the investment variability and, that as leasing grows by 1 percentage point, investment grows by 0.3%; the elasticity is reduced to 0.2 in the model with all the exogenous variables taken into account (the equipment leasing, the demand (sum of consumptions and exports), the long-term interest rate and the industrial production index).