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 Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne in its series Documents de travail du Centre d'Economie de la Sorbonne with number 11034.
Length: 20 pages
Date of creation: May 2011
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Production function; productivity; factor returns.;
Other versions of this item:
- Cette, G. & Dromel, N. & Lecat, R. & Paret, A-C., 2011. "Production factor returns: the role of factor utilisation," Working papers 317, Banque de France.
- 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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- Daveri, F. & Lecat, R. & Parisi , M L., 2011.
"Service deregulation, competition and the performance of French and Italian firms,"
346, Banque de France.
- Francesco Daveri & Rèmy Lecat & Maria Laura Parisi, 2013. "Service deregulation, competition and the performance of French and Italian firms," Working Papers 3, Department of the Treasury, Ministry of the Economy and of Finance.
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