This paper examines the nature of capital adjustment costs at the plant level. Using an indirect inference method, the authors estimate the structural parameters of a rich model of capital adjustment costs. The findings suggest that a model incorporating both convex and nonconvex adjustment costs, along with irreversibility, best fits the data. The model captures the nonlinear relationship between investment and profitability, with investment being relatively insensitive to small profitability shocks but strongly responsive to large ones. The results also highlight the asymmetry in the response to positive and negative shocks. The authors find that models with only convex adjustment costs fail to capture the observed investment patterns, while models with nonconvex costs and irreversibility better explain the data. The study also shows that nonconvex adjustment costs and irreversibility are important for understanding investment dynamics at the plant level, even if they are less significant at the aggregate level. The paper concludes that the presence of nonconvex adjustment costs and irreversibility is crucial for accurately modeling investment behavior and policy implications.This paper examines the nature of capital adjustment costs at the plant level. Using an indirect inference method, the authors estimate the structural parameters of a rich model of capital adjustment costs. The findings suggest that a model incorporating both convex and nonconvex adjustment costs, along with irreversibility, best fits the data. The model captures the nonlinear relationship between investment and profitability, with investment being relatively insensitive to small profitability shocks but strongly responsive to large ones. The results also highlight the asymmetry in the response to positive and negative shocks. The authors find that models with only convex adjustment costs fail to capture the observed investment patterns, while models with nonconvex costs and irreversibility better explain the data. The study also shows that nonconvex adjustment costs and irreversibility are important for understanding investment dynamics at the plant level, even if they are less significant at the aggregate level. The paper concludes that the presence of nonconvex adjustment costs and irreversibility is crucial for accurately modeling investment behavior and policy implications.