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Cyclicality of capital-intensive industries: a system dynamics simulation study of the paper industry

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  • Berends, P. A. J.
  • Romme, A. G. L.

Abstract

This paper provides a view on the cyclicality of capital-intensive industries that could add considerably to our understanding of how cycles in prices, profits and capacity come about. Previous studies of business cycles focus on macro-economic systems or on the agricultural sector. Causes for fluctuations are typically believed to be mainly exogenous in nature. We seek to extend the existing literature on industrial cycles by developing a model that incorporates endogenously generated cyclicality. A simulation model of the paper industry is developed, and validated on the basis of data for the US paper industry.

Suggested Citation

  • Berends, P. A. J. & Romme, A. G. L., 2001. "Cyclicality of capital-intensive industries: a system dynamics simulation study of the paper industry," Omega, Elsevier, vol. 29(6), pages 543-552, December.
    • Handle: RePEc:eee:jomega:v:29:y:2001:i:6:p:543-552
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    Cited by:

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    3. Brunnhofer, Magdalena & Gabriella, Natasha & Schöggl, Josef-Peter & Stern, Tobias & Posch, Alfred, 2020. "The biorefinery transition in the European pulp and paper industry – A three-phase Delphi study including a SWOT-AHP analysis," Forest Policy and Economics, Elsevier, vol. 110(C).
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    5. J H Chen & T S Jan, 2005. "A system dynamics model of the semiconductor industry development in Taiwan," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 56(10), pages 1141-1150, October.
    6. Martina Novotná & Ivana Faltová Leitmanová & Jiří Alina & Tomáš Volek, 2020. "Capital Intensity and Labour Productivity in Waste Companies," Sustainability, MDPI, vol. 12(24), pages 1-15, December.
    7. Bob Walrave & A Georges L Romme & Kim E van Oorschot & Fred Langerak, 2017. "Managerial attention to exploitation versus exploration: toward a dynamic perspective on ambidexterity," Industrial and Corporate Change, Oxford University Press, vol. 26(6), pages 1145-1160.
    8. Arango, Santiago & Larsen, Erik, 2011. "Cycles in deregulated electricity markets: Empirical evidence from two decades," Energy Policy, Elsevier, vol. 39(5), pages 2457-2466, May.
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