Causes of Excess Capacity

Samidh Pal

Papers from arXiv.org

Abstract: This study delves into the origins of excess capacity by examining the reactions of capital, labor, and capital intensity. To achieve this, we have employed a novel three-layered production function model, estimating the elasticity of substitution between capital and labor as a nested layer, alongside capital intensity, for all industry groups. We have then selectively analyzed a few industry groups for comparative purposes, taking into account the current government policies and manufacturing plant realities. Ultimately, we recommend that policymakers address the issue of excess capacity by stimulating the expansion of manufacturing plants with cutting-edge machinery. Our findings and recommendations are intended to appeal to academics and policymakers alike.

Date: 2023-04
New Economics Papers: this item is included in nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2304.02137 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2304.02137

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().