Lower Bound Estimation - Quantile Regression and Simplex Method: An Application to Italian Manufacturing Sectors

This paper estimates Suttonʹs lower bound [1991, 1998] by quantile regression, and thus shows the influence of outliers on previous estimates that used the simplex method. The lower bound estimates are obtained separately for exogenous and endogenous sunk cost industries in Italian manufacturing sectors in 1995, using microdata from the SCIʹ95 (Firms Accounts System) survey conducted by ISTAT (National Institute of Statistics, Italy). The results suggest that Suttonʹs predictions are robust.