Productivity, price recovery, capacity constraints and their financial consequences

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 indust...

Full description

Saved in:

Bibliographic Details
Published in:	Journal of productivity analysis 2014-02, Vol.41 (1), p.3-17
Main Authors:	Grifell-Tatjé, E., Lovell, C. A. K.
Format:	Article
Language:	eng
Subjects:	Accounting/Auditing Analysis Boats Capacity utilization Cost allocation Decomposition Econometrics Economic theory Economics Economics and Finance Executive compensation Extractive industries Financial performance Fishery economics Fishing industry Geometric mean Mathematical vectors Microeconomics Mining industries Mining industry Operations Research/Decision Theory Paasche price index Prices Product lines Productivity Profit margins Ratios Return on assets Revenue Social responsibility Studies
Online Access:	Get full text
Tags:	Add Tag No Tags, Be the first to tag this record!

Description
Summary:	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 quantitybased 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.
ISSN:	0895-562X 1573-0441