ESTIMATING FIRM-LEVEL CAPITAL STOCK: THE EVIDENCE FROM TURKEY

In this study, we mainly discuss the validity of estimating the capital stock at the firm level. Unlike the macro-level estimates, the micro-level estimates require a different treatment on the capital accumulation equation, especially on the estimate of the initial level of capital stock, controlling for firms' entry and exit, and changing composition of firm-level investments. We also consider the ownership of capital assets acquired by different types of finance other than direct purchases-by leasing or by rent. Considering these situations, we elaborate on the controversial issues of existing methods. We then, to some extent, refine alternative methods for estimating the capital stock in Turkey for the period 2005-15 using extensive firm-level data. Using these estimates, we focus on the behavioral trends of firms (i.e., capital-related variables) in manufacturing, services, and information and communication sectors in Turkey.