Direct And Indirect Measures Of Capacity Utilization: A Non-Parametric Analysis Of Us Manufacturing
AbstractWe measure the capacity output of a firm as the maximum amount producible by a firm given a specific quantity of the quasi-fixed input and an overall expenditure constraint for its choice of variable inputs. We compute this indirect capacity utilization measure for the total manufacturing sector in the USA as well as for a number of disaggregated industries, for the period 1970-2001. We find considerable variation in capacity utilization rates both across industries and over years within industries. Our results suggest that the expenditure constraint was binding, especially in periods of high interest rates. Copyright Blackwell Publishing Ltd and The University of Manchester 2006.
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Bibliographic InfoArticle provided by University of Manchester in its journal Manchester School.
Volume (Year): 74 (2006)
Issue (Month): 4 (07)
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Other versions of this item:
- Subhash C. Ray & Kankana Mukherjee & Yanna Wu, 2005. "Direct and Indirect Measures of Capacity Utilization: A Nonparametric Analysis of U.S. Manufacturing," Working papers 2005-36, University of Connecticut, Department of Economics.
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- L6 - Industrial Organization - - Industry Studies: Manufacturing
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