Productivity, Price Recovery, Capacity Constraints and their Financial Consequences
Mining and fishing are both extractive industries, although one resource is renewable and the other is not. Miners and fishers pursue financial objectives, although their objectives may differ. In both industries financial performance is influenced by productivity and prices. Finally, in both industries capacity constraints influence financial performance, perhaps but not necessarily through their impact on productivity, and both industries encounter external as well as internal capacity constraints. In this study we develop an analytical framework that links all four phenomena. We use return on assets to measure financial performance, and our analytical framework is provided by the duPont triangle. We measure productivity change in two ways, with a theoretical technology-based index and with empirical price-based indexes. We measure price change with empirical quantity-based indexes. We measure internal capacity utilization by relating a pair of output quantity vectors representing actual output and full capacity output, and we develop physical and economic measures of internal capacity utilization. We also show how external capacity constraints can restrict the ability to reach full capacity output. The analytical framework has productivity change, price change and change in capacity utilization influencing change in return on assets.
|Date of creation:||Jun 2013|
|Date of revision:|
|Contact details of provider:|| Postal: St. Lucia, Qld. 4072|
Phone: +61 7 3365 6570
Fax: +61 7 3365 7299
Web page: http://www.uq.edu.au/economics/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Antonio Estache & Emili Grifell-Tatjé, 2013. "How (Un)Even was the Distribution of the Impacts of Mali's Water Privatisation across Stakeholders?," Journal of Development Studies, Taylor & Francis Journals, vol. 49(4), pages 483-499, April.
- Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "The Economic Theory of Index Numbers and the Measurement of Input, Output, and Productivity," Econometrica, Econometric Society, vol. 50(6), pages 1393-1414, November.
- Bert M. Balk, 2010. "An Assumption-Free Framework For Measuring Productivity Change," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(s1), pages S224-S256, 06.
- Shubik Martin, 2011. "A Note on Accounting and Economic Theory: Past, Present, and Future," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 1(1), pages 1-26, January.
- 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.
- Shawna Grosskopf & Kathy J. Hayes & Lori L. Taylor & William L. Weber, 1997. "Budget-Constrained Frontier Measures Of Fiscal Equality And Efficiency In Schooling," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 116-124, February.
- Johnson, H. Thomas, 1972. "Early Cost Accounting for Internal Management Control: Lyman Mills in the 1850's," Business History Review, Cambridge University Press, vol. 46(04), pages 466-474, December.
- Fare, Rolf & Grosskopf, Shawna & Kokkelenberg, Edward C, 1989. "Measuring Plant Capacity, Utilization and Technical Change: A Nonparametric Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(3), pages 655-66, August.
- Squires, Dale & Jeon, Yongil & Grafton, R. Quentin & Kirkley, James E., 2010.
"Controlling excess capacity in common-pool resource industries: the transition from input to output controls,"
Australian Journal of Agricultural and Resource Economics,
Australian Agricultural and Resource Economics Society, vol. 54(3), September.
- Dale Squires & Yongil Jeon & R. Quentin Grafton & James Kirkley, 2010. "Controlling excess capacity in common-pool resource industries: the transition from input to output controls ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(3), pages 361-377, 07.
- Johnson, H. Thomas, 1975. "Management Accounting in an Early Integrated Industrial: E. I. duPont de Nemours Powder Company, 1903-1912," Business History Review, Cambridge University Press, vol. 49(02), pages 184-204, June.
- De Borger, Bruno & Kerstens, Kristiaan, 2000.
" The Malmquist Productivity Index and Plant Capacity Utilization,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 102(2), pages 303-10, June.
- DE BORGER, Bruno & KERSTENS, Kristiaan, . "The Malmquist productivity index and plant capacity utilisation," Working Papers 2000020, University of Antwerp, Faculty of Applied Economics.
- Segerson, Kathleen & Squires, Dale, 1990. "On the measurement of economic capacity utilization for multi-product industries," Journal of Econometrics, Elsevier, vol. 44(3), pages 347-361, June.
- E. Grifell-Tatjé & C. Lovell, 1999. "A generalized Malmquist productivity index," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 7(1), pages 81-101, June.
- Shawna Grosskopf & Kathy J. Hayes & Lori L. Taylor & William L. Weber, 1999. "Anticipating the Consequences of School Reform: A New Use of DEA," Management Science, INFORMS, vol. 45(4), pages 608-620, April.
- Coelli, Tim & Grifell-Tatje, Emili & Perelman, Sergio, 2002.
"Capacity Utilization and Profitability: A Decomposition of Short Run Profit Efficiency,"
Efficiency Series Papers
2002/01, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
- Coelli, Tim & Grifell-Tatje, Emili & Perelman, Sergio, 2002. "Capacity utilisation and profitability: A decomposition of short-run profit efficiency," International Journal of Production Economics, Elsevier, vol. 79(3), pages 261-278, October.
- COELLI, Tim & GRIFELL-TATJE, Emili & PERELMAN, Sergio, 2001. "Capacity utilisation and profitability: a decomposition of short run profit efficiency," CORE Discussion Papers 2001052, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Lindebo, Erik & Hoff, Ayoe & Vestergaard, Niels, 2007. "Revenue-based capacity utilisation measures and decomposition: The case of Danish North Sea trawlers," European Journal of Operational Research, Elsevier, vol. 180(1), pages 215-227, July.
- Ana Rodríguez-Álvarez & David Roibás-Alonso & Alan Wall, 2013. "The response of decentralized health services to demand uncertainty and the role of political parties in the Spanish public health system," Journal of Productivity Analysis, Springer, vol. 40(3), pages 357-365, December.
- Fare, Rolf & Grosskopf, Shawna & Kirkley, Jim, 2000. "Multi-output Capacity Measures and Their Relevance for Productivity," Bulletin of Economic Research, Wiley Blackwell, vol. 52(2), pages 101-12, April.
- Ray, Subhash C & Desli, Evangelia, 1997. "Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries: Comment," American Economic Review, American Economic Association, vol. 87(5), pages 1033-39, December.
- Segerson, Kathleen & Squires, Dale, 1995. "Measurement of Capacity Utilization for Revenue-Maximizing Firms," Bulletin of Economic Research, Wiley Blackwell, vol. 47(1), pages 77-84, January.
- John B. Walden & James E. Kirkley & Rolf Färe & Philip Logan, 2012. "Productivity Change under an Individual Transferable Quota Management System," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(4), pages 913-928.
When requesting a correction, please mention this item's handle: RePEc:qld:uqcepa:86. 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: (SOE IT)
If references are entirely missing, you can add them using this form.