Without capital accumulation, is productive scale expansion possible?

Masaya Fujita

International Journal of Critical Accounting, 2020, vol. 11, issue 2, 114-124

Abstract: The expansion of productive scale is often funded by the immediate reinvestment of a depreciation fund. This phenomenon is called Lomann-Ruchti effect. The question is whether this is possible without additional investment or not. One theory claims this is attributable to the increased circulation of advanced capital, whereas, this article argues that the effect is realised by capital accumulation hidden behind depreciation procedures.

Keywords: depreciation; depreciation fund; Lomann-Ruchti effect; cycle of fixed assets; depreciation multiplier; reinvestment of depreciation fund; expansion of productive scale; capital accumulation. (search for similar items in EconPapers)
Date: 2020
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