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Capital Utilisation and Retirement

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  • Antoine Bonleu

    () (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales)

  • Gilbert Cette

    () (Centre de recherche de la Banque de France - Banque de France)

  • Guillaume Horny

    () (Centre de recherche de la Banque de France - Banque de France)

Abstract

This empirical analysis aims at assessing the effect of the economic climate and the intensity of capital utilisation on companies' capital retirement behaviour. It is conducted using individual company data, as well as original data on the degree of utilisation of production factors. The sample includes 6,998 observations over the period 1996-2008. This database is, to our knowledge, unique for the empirical analysis of the intensity of capital utilisation on firms' capital retirement behaviour. We adjust for endogeneity biases by means of instrumental variables. The main results obtained from the estimation of capital retirement models may be summarised as follows: i) The retirement rate decreases with the variations in cyclical pressures measured by the changes in output and the workweek of capital; this relation corresponds to a countercyclical decelerator effect on capital retirement; ii) The capital retirement rate increases with the structural intensity of capital utilisation; this effect, which corresponds to a wear and tear one, is nevertheless small compared to the decelerator one; iii) The profit rate does not have a significant impact on the retirement rate. Compared with the existing literature, here mainly Mairesse and Dormont (1985), the contribution of these results is to show, through the use of unique survey data, that the effect of the intensity of capital utilisation on capital retirement is structurally positive, via a wear and tear effect, and cyclically negative, via a decelerator effect which completes that already taken into account via the effect of changes in value added.

Suggested Citation

  • Antoine Bonleu & Gilbert Cette & Guillaume Horny, 2011. "Capital Utilisation and Retirement," Working Papers halshs-00635477, HAL.
  • Handle: RePEc:hal:wpaper:halshs-00635477
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00635477
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    References listed on IDEAS

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    Cited by:

    1. Valérie Chouard & Daniel Fuentes Castro & Delphine Irac & Matthieu Lemoine, 2014. "Assessing the losses in euro area potential productivity due to the financial crisis," Applied Economics, Taylor & Francis Journals, vol. 46(23), pages 2711-2720, August.
    2. Bergeaud, A. & Cette, G. & Lecat, R., 2015. "Productivity trends from 1890 to 2012 in advanced countries," Rue de la Banque, Banque de France, issue 07, June..
    3. Joseph Lanfranchi & John Treble, 2010. "Just-In-Time Production, Work Organization And Absence Control," Manchester School, University of Manchester, vol. 78(5), pages 460-483, September.
    4. Michalis Nikiforos, 2012. "On the Utilization Controversy: A Theoretical and Empirical Discussion of the Kaleckian Model of Growth and Distribution," Economics Working Paper Archive wp_739, Levy Economics Institute.
    5. Antonio Garofalo & Concetto Paolo Vinci, 2000. "Employment, capital operating time and efficiency wages hypothesis: is there any room for worksharing," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 168, pages 397-442.
    6. Fabrice Gilles, 2015. "Evaluating the Impact of a Working Time Regulation on Capital Operating Time: The French 35-hour Work Week Experience," Scottish Journal of Political Economy, Scottish Economic Society, vol. 62(2), pages 117-148, May.
    7. Gilbert Cette & Yusuf Kocoglu & Arnaud Sylvain, 2007. "Flexibilité organisationnelle et utilisation des facteurs de production. Une comparaison européenne," Revue de l'OFCE, Presses de Sciences-Po, vol. 101(2), pages 315-332.
    8. Antonio Garofalo & R. Plasman & Concetto Paolo Vinci, 2000. "Reducing Working Time In An Efficiency Wage Economy With A Dual Labour Market," Working Papers 7_2000, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
    9. Alizadeh, Amir H. & Strandenes, Siri Pettersen & Thanopoulou, Helen, 2016. "Capacity retirement in the dry bulk market: A vessel based logit model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 92(C), pages 28-42.

    More about this item

    Keywords

    Capital; Capital measure; Capital retirement; Capital utilisation;

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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