A Comparative Study of Capacity Utilization in Iran Manufacturing Industries

Document Type : Research Paper

Authors

1 Professor at Faculty of Economics, Allameh Tabataba'i University

2 Assistant Professor, Faculty of Economics, Allameh Tabataba'i University

3 PhD student at Allameh Tabataba'i University

Abstract

The purpose of this paper is to examine the extent of capacity utilization in Iran manufacturing Industries, basing our study on the 1995-2011 period. We used Translog cost function as introduced by Jorgenson and Christiana in 1973, taking minimum point of average cost as the point corresponding to the optimum point where output is maximized. We calculated the capacity utilization rate as the percentage of actual output to optimum output for manufacturing industries of Iran using ISIC Rev.3 Codes. The result shows that on average manufacturing industries of Iran are producing less than %50 of their nominal capacity. With the exception of Chemical and Petrochemical industries, capacity utilization in all branches is very low, ranging from %24 to %51, except nonmetallic minerals for which this rate was %84.2.

Keywords

References

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