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Capacity Utilization in a Generalized Malmquist Index Including Environmental Factors: A Decomposition Analysis

Capacity Utilization in a Generalized Malmquist Index Including Environmental Factors: A... Abstract: Productivity measures ignoring environmental effects may give misleading information on total productivity growth. Further, business cycles in the form of capacity utilization may significantly influence productivity measures. We develop an overall Malmquist productivity index and decompose changing efficiency rates into a contribution from environmental factors, capital, and capacity utilization. Our new combined capacity utilization element contributes to the literature in that it also takes into account the restriction for producing negative externalities. Empirical applications illustrate that the choice of inputs influences the overall productivity measure and its decomposition into efficiency changes and technical changes, and the capacity utilization element. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Land Economics University of Wisconsin Press

Capacity Utilization in a Generalized Malmquist Index Including Environmental Factors: A Decomposition Analysis

Land Economics , Volume 85 (3) – Apr 4, 2009

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Publisher
University of Wisconsin Press
Copyright
Copyright © University of Wisconsin Press
ISSN
1543-8325
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Abstract

Abstract: Productivity measures ignoring environmental effects may give misleading information on total productivity growth. Further, business cycles in the form of capacity utilization may significantly influence productivity measures. We develop an overall Malmquist productivity index and decompose changing efficiency rates into a contribution from environmental factors, capital, and capacity utilization. Our new combined capacity utilization element contributes to the literature in that it also takes into account the restriction for producing negative externalities. Empirical applications illustrate that the choice of inputs influences the overall productivity measure and its decomposition into efficiency changes and technical changes, and the capacity utilization element.

Journal

Land EconomicsUniversity of Wisconsin Press

Published: Apr 4, 2009

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