Firm Heterogeneity, Capacity Utilization, and the Business Cycle

Fagnart, Jean-François; Licandro-Goldaracena, Omar; Portier, Franck

doi:10.1006/redy.1998.0057

Cited by 33 publications

(21 citation statements)

References 10 publications

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“…Klein (1960) and Berndt and Morrison (1981) develop such a concept based on short-run and long-run average cost curves. Fagnart, Licandro, and Portier (1999) and Coelli, Grifell-Tatje, and Perelman (2001) propose definitions centered on a profit-maximizing level of output, while others define capacity in terms of the firm's cost and revenue functions (Färe, Grosskopf, and Kirkley 2000). In most fisheries, however, the general lack of cost data often precludes the use of economic measures (Pascoe et al 2003).…”

Section: Fishery Profit and Malleability Of Capitalmentioning

confidence: 99%

Excess Capacity and Capital Malleability in a Fishery with Myopic Expectations

Rust

Jennings

Yamazaki

2016

Marine Resource Economics

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A B S T R A C TUnderstanding the process whereby fishing capital accumulates and excess capacity emerges, particularly in fisheries where incentives for race to fish and race to invest are present, and where capital is not perfectly malleable, remains an important topic. We develop a dynamic model, incorporating quasi-malleable capital, race to fish and invest behaviors and myopic expectations, in which the level of excess capacity is endogenously determined. We show the importance of capital malleability, and of other biological and economic conditions, in determining the existence and strength of persistent equilibrium excess capacity in the fishery. We also highlight a link between the state of the fishery at the time race behavior emerges and the resultant level of excess capacity. Our results have implications for both the management of excess capacity and the use of empirical measures of excess capacity as performance indicators in fisheries where race behaviors are present.

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Section: Fishery Profit and Malleability Of Capitalmentioning

confidence: 99%

Excess Capacity and Capital Malleability in a Fishery with Myopic Expectations

Rust

Jennings

Yamazaki

2016

Marine Resource Economics

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“…This is along the lines of Antràs (2004) and McAdam and Willman (2013). Then, we add the possibility of product demand uncertainty in the spirit of Andrés et al (1990aAndrés et al ( , 1990b, Fagnart et al (1999) and Bontempi et al (2010). In this context, when expected demand is not met by its actual value, firms are likely to react by adjusting their use of the production factors either by hiring or firing workers, by changing the rate of capacity utilization, or by using both mechanisms.…”

Section: Analytical Frameworkmentioning

confidence: 99%

The determinants of capital intensity in Japan and the US

Judzik

Sala

2015

Journal of the Japanese and International Economies

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We estimate the determinants of capital intensity in Japan and the US, characterized by striking different paths. We augment an otherwise standard Constant Elasticity of Substitution (CES) model with demand-side considerations, which we find especially relevant in the US. In this augmented setting, the elasticity of substitution between capital and labor is placed around 0.85 in Japan, and 0.30 in the US. We also find evidence of biased technical change, which is capital-saving in Japan but labor-saving in the US. These differences help us explain the diverse experience in the capital deepening process of these economies, and lead us to conclude that demand-side drivers may also be relevant to account for different growth experiences. A close look at the nature of technological change is also needed before designing one-size-fits-all industrial, economic growth, and/or labor market policies.JEL Classification: E22, E24, O33.

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“…The issue of firm heterogeneity is also remarked in recent contributions to the real business cycle literature analyzing the role of idle productive capacities in propagating technological shocks (Fagnart et al, 1999). Given limited input substitution in the short run, demand uncertainty at the time of capacity choices can explain why the installed productive equipments of the economy are usually underutilized in equilibrium.…”

Section: Capacity Utilizationmentioning

confidence: 99%

Firm heterogeneity and regional business cycles differentials

Basile¹,

Nardis²,

Pappalardo³

2013

Journal of Economic Geography

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Firm Heterogeneity, Capacity Utilization, and the Business Cycle

Cited by 33 publications

References 10 publications

Excess Capacity and Capital Malleability in a Fishery with Myopic Expectations

Excess Capacity and Capital Malleability in a Fishery with Myopic Expectations

The determinants of capital intensity in Japan and the US

Firm heterogeneity and regional business cycles differentials

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