The Role of Financial Capital in Production

The Role of Financial Capital in Production

Review of Income and Wealth, 1999, vol. 45, issue 4, pages 419-34

Abstract: It is increasingly acknowledged that the financial structure of a firm is an important determinant of its production costs. This paper argues that the use of a firm's liabilities should he seen as a separate input in the production process. At the same time, the input of non-financial assets is limited to the value that is used up during the reference period. The paper elaborates on these ideas and shows their use in empirical work. It is concluded that the approach set out in this paper establishes a much closer relationship of general economic accounting and analysis to business economics. Copyright 1999 by The International Association for Research in Income and Wealth.

Date: 1999

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Persistent link: http://EconPapers.repec.org/RePEc:bla:revinw:v:45:y:1999:i:4:p:419-34

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