Capacity of the Firm and the Economics of the Growth of Firms

Stephen L. Gruneberg and Graham J. Ive
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Stephen L. Gruneberg: University College London
Graham J. Ive: University College London

Chapter 8 in The Economics of the Modern Construction Firm, 2000, pp 187-197 from Palgrave Macmillan

Abstract: Abstract In the preceding chapter we discussed the meaning of capacity for industries in general and for construction sector industries in particular. The meaning of excess capacity in firms in the building materials industry is clear, and refers to under-utilisation of capital intensive plant. Its meaning and existence in construction industry firms is less clear. If it exists, it will be largely a matter of under-utilisation of the firm’s core staff. ‘For the most part, “excess capacity” is externalised by the contracting firm, appearing as unemployment of construction labour, under utilisation of hire firms’ plant; increased stocks, or reduced output, in the industries producing building inputs; (money) capital held liquid e.g. cash or short term deposits; and a flow of money-capital from construction to other sectors, channelled through both the banks and multi-industry firms’ (Ive, 1983, pp. 72–3)

Keywords: Cost Curve; Full Capacity; Order Book; Spare Capacity; Short Term Deposit (search for similar items in EconPapers)
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-51043-2_8

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DOI: 10.1057/9780230510432_8

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