IDEAS home Printed from
   My bibliography  Save this article

Direct and indirect measures of capacity utilization and Economic growth: A nonparametric analysis of the Tunisian industry


  • Kamel HELALI

    (Faculty of Economics and Management of Sfax, University of Sfax, Tunisia)

  • Maha KALAI

    (Faculty of Economics and Management of Sfax, University of Sfax, Tunisia)


In this paper, we suggest a measure of the short run capacity utilization rates based on a reduced version of the indirect production function of Shephard. More precisely, we define the production capacity as the maximum quantity produced by the firm given the specific quantity of the quasi-fixed input and the overall budget constraint for its choice of variable inputs. The present study extends the non-parametric literature by modeling the indirect production function (restricted and unrestricted) and derives a measure of the capacity utilization rate using the DEA. We used annual data on time series on the overall output as well as the quantities and prices of the inputs published by the Tunisian Institute of Competitiveness and Quantitative Studies to measure the capacity utilization rate in the manufacturing industry for the period 1961-2010. Our empirical analysis aims to show the important variations in the capacity utilization both across industries and, over time, within the manufacturing industry.

Suggested Citation

  • Kamel HELALI & Maha KALAI, 2013. "Direct and indirect measures of capacity utilization and Economic growth: A nonparametric analysis of the Tunisian industry," E3 Journal of Business Management and Economics., E3 Journals, vol. 4(6), pages 144-155.
  • Handle: RePEc:etr:series:v:4:y:2013:i:6:p:144-155

    Download full text from publisher

    File URL:
    File Function: Full text
    Download Restriction: no

    References listed on IDEAS

    1. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    2. Berndt, Ernst R & Morrison, Catherine J, 1981. "Capacity Utilization Measures: Underlying Economic Theory and an Alternative Approach," American Economic Review, American Economic Association, vol. 71(2), pages 48-52, May.
    3. Subhash C. Ray & Kankana Mukherjee & Yanna Wu, 2006. "Direct And Indirect Measures Of Capacity Utilization: A Non-Parametric Analysis Of Us Manufacturing," Manchester School, University of Manchester, vol. 74(4), pages 526-548, July.
    4. Subhash C. Ray, 2002. "Nonparametric Measures of Capacity Utilization: A Dual Approach," Working papers 2002-35, University of Connecticut, Department of Economics.
    Full references (including those not matched with items on IDEAS)


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:etr:series:v:4:y:2013:i:6:p:144-155. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Andrew Godwin). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.