Production factor returns: the role of factor utilisation
AbstractShort-term increasing returns to production factors are usually found in empirical studies. We argue they can be due to omitted variables, particularly the intensity of factor utilisation. Thanks to original French firm-level data (1992-2008), we show how increasing returns to scale disappear when working time, capacity utilisation rate and mainly capital operating time are introduced in the production function.
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Bibliographic InfoPaper provided by Banque de France in its series Working papers with number 317.
Length: 22 pages
Date of creation: 2011
Date of revision:
Production function; productivity; factor returns.;
Other versions of this item:
- Gilbert Cette & Nicolas Dromel & Rémy Lecat & Anne-Charlotte Paret, 2011. "Production factor returns: the role of factor utilisation," Documents de travail du Centre d'Economie de la Sorbonne 11034, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
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- Francesco Daveri & Rèmy Lecat & Maria Laura Parisi, 2013.
"Service deregulation, competition and the performance of French and Italian firms,"
3, Department of the Treasury, Ministry of the Economy and of Finance.
- Daveri, F. & Lecat, R. & Parisi , M L., 2011. "Service deregulation, competition and the performance of French and Italian firms," Working papers 346, Banque de France.
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