The econometric testing of investment incentives: A cointegrated approach

Thie paper re-examines the link between shipping investment and investment incentives, first explored in this journal by Marlow, and subsequently developed by mcWilliams et al. in the July-September issue. Examination of the ststistical properties of the data reveals that some of McWilliams' results may be flawed. A modified version of the Marlow model is estimated. checking for statistical and economic consistency, using cointegration, checking for statistical and economic consistency, using cointegration techniques. The estimated model resolves marlow's original challenge, but does not appear to be as robust as could be wished.