Productivity, price recovery, capacity constraints and their financial consequences

Grifell-Tatje, E. and Lovell, C. A. K. (2014) Productivity, price recovery, capacity constraints and their financial consequences. Journal of Productivity Analysis, 41 1: 3-17. doi:10.1007/s11123-013-0373-8

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Author Grifell-Tatje, E.
Lovell, C. A. K.
Title Productivity, price recovery, capacity constraints and their financial consequences
Journal name Journal of Productivity Analysis   Check publisher's open access policy
ISSN 0895-562X
Publication date 2014-01-01
Year available 2013
Sub-type Article (original research)
DOI 10.1007/s11123-013-0373-8
Open Access Status Not yet assessed
Volume 41
Issue 1
Start page 3
End page 17
Total pages 15
Place of publication New York, NY, United States
Publisher Springer
Language eng
Abstract 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.
Keyword Capacity constraints
duPont triangle
Price recovery
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2014 Collection
School of Economics Publications
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Citation counts: TR Web of Science Citation Count  Cited 2 times in Thomson Reuters Web of Science Article | Citations
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