Industrial Capacity Utilization Research Articles

The Per Capita Meat Consumption: the Trend and Macroeconomic Determinants in Nigeria

This study examined trends in per capita consumption of game meat, mutton, pork and total meat and provided evidence of their correlation with key macroeconomic factors in Nigeria. Data from FAOSTAT, the Central Bank of Nigeria (CBN) and the World Bank (WB) covering the period 1981 to 2021 were analyzed. The results showed that game meat, mutton, pork and total meat consumption per capita recorded compound annual exponential growth rates of -0.87%, 2.05%, 2.08% and -0.54%, respectively. The empirical results showed that the rate of inflation, the nominal exchange rate, GDP per capita, credit to the agricultural sector, and capacity utilization in the meat industry all had varying degrees of impact on per capita meat consumption (including game meat, mutton, pork and total meat) in both the short and long runs. In order to increase per capita meat consumption in the country, it is strongly recommended to effectively manage the identified macroeconomic variables and implement appropriate measures to stabilize inflation and the nominal exchange rate. At the same time, concerted efforts should be made to increase GDP per capita.

A study of the impact of de-capacity policies on industry capacity utilization paths: Evidence from the Chinese steel industry

The issue of overcapacity has become an unavoidable challenge in the rapid development of nations, constraining economic progress, particularly within industries like steel, coal, and cement. This study, using the example of the Chinese steel industry in the context of supply-side structural reform, employs data envelopment analysis (DEA) models to measure capacity utilization, and ordinary least squares (OLS) models to investigate the impact of capacity reduction policies on the steel industry’s capacity utilization pathways. The research findings indicate that capacity reduction policies have a significantly positive impact on the capacity utilization in the steel industry. They enhance capacity utilization through four pathways: “equipment optimization and upgrade”, “enterprise mergers and restructuring”, “technology innovation-driven”, and “environmental protection regulations”. Among these, “technology innovation-driven” and “environmental protection regulations” play predominant roles, while the effect of “international market expansion” on increasing capacity utilization in the steel industry is not significant. To ensure the sustained effectiveness of capacity reduction policies, the nation should continue to strengthen the “technology innovation-driven” and “environmental protection regulations” pathways. Additionally, it should activate the “national market expansion” pathway, fully exploring the potential for international cooperation to achieve improved capacity utilization in the steel industry.

The impact of government subsidies on capacity utilization in the Chinese renewable energy industry: Does technological innovation matter?

With the rapid increase in China's installed capacity of renewable energy (RE), there has been growing concern regarding the problem of overcapacity in China's RE industry. However, there is ongoing debate regarding the influence of government subsidies (GS) on the RE industry's capacity utilization (CU), and the role of technological innovation in this aspect has been overlooked. This study utilizes panel data from 114 Chinese RE-listed companies spanning from 2011 to 2021, aiming to uncover the impact of GS on the CU of RE. The findings show that GS reduces the CU of RE firms. Specifically, GS has not only facilitated investments in RE but also bolstered enterprises' market share. However, the former effect is stronger, reducing the CU of RE companies. In addition, our findings reveal that when the technological innovation capability of RE companies surpasses a certain threshold, the negative impact is weakened. Finally, for non-state-owned, growth-stage, low R&D subsidy proportion, and western region-based RE firms, the adverse effect of GS on their CU is particularly prominent, but no statistically significant evidence to suggest such an effect for state-owned, non-growth-stage, high R&D subsidy proportion, and non-western region-based RE firms. Accordingly, we present targeted policy recommendations.

Convex Supply Curves

We provide evidence that industries' supply curves are convex. To guide our empirical analysis, we develop a model in which capacity constraints at the firm level generate supply curves that are convex in logs at the industry level. The industry's capacity utilization rate is a sufficient statistic for the supply elasticity. Using data on capacity utilization and three different instruments, we estimate the supply curve and find robust evidence for an economically sizable degree of convexity. The nonlinearity we identify has several macroeconomic implications, including that responses to shocks are state dependent and that the Phillips curve is convex. (JEL D21, E22, E23, E32, E62, L60)

Does Low-Carbon City Policy Improve Industrial Capacity Utilization? Evidence from a Quasi-Natural Experiment in China

A low-carbon city policy (LCC) is a comprehensive environmental regulation to promote urban green development and resolve the overcapacity contradiction. This study uses China’s low-carbon city pilot policy as a “quasi-natural experiment” based on a panel of 266 Chinese cities, covering three batches of low-carbon pilot cities from 2003 to 2019. We measure industrial capacity utilization at the city level and then construct a time-varying DID (TV-DID) model to investigate the effect of a low-carbon city policy on industrial capacity utilization in Chinese cities, exploring the mechanism, heterogeneity, and spatial effects. It is found that (1) LCC improves industrial capacity utilization by approximately 3.2%, and the above finding still holds after a series of robustness tests, such as the parallel trend test, PSM-DID, DDD, and placebo test. (2) LCC improves industrial capacity utilization through three channels: alleviating resource misallocation, promoting industrial structure upgrading, and stimulating technological innovation. (3) The improvement of LCC on industrial capacity utilization has heterogeneity and positive spatial spillover effect. (4) The heterogeneity analysis shows that the improvement of LCC on industrial capacity utilization is stronger in cities in the high quartile of industrial capacity utilization, cities in old industrial bases, cities along the “Belt and Road” route, and cities in a free-trade zone. The theoretical analysis and empirical results of this study provide empirical support for the promotion of low-carbon city policy globally and provide ideas for solving the overcapacity contradiction in the context of global decarbonization.

THE EFFECTS OF COVID-19 PANDEMIC ON THE SECTOR-SPECIFIC AND INTER-SECTORAL ECONOMIC GROWTH IN TURKEY

Bu çalışmanın amacı ekonomideki sektörlerin pandemi sürecinde nasıl etkilendiği ve sektörler arasındaki etkileşimin nasıl olduğunu araştırmaktır. Bu amaç doğrultusunda Covid-19 pandemisinin oluşturduğu şokların sektörleri nasıl etkilediği VAR analizi yöntemi ile incelenmiştir. Çalışmada 2015 M:1- 2020 M:5 dönemi aylık verileri kullanılarak sanayi üretim endeksi, imalat sanayi kapasite kullanım oranı, inşaat sektörü maliyet endeksi, perakende ticaret ve hizmet sektörü, istihdam oranı, ihracat ve ithalat sektörü endeksi verileri analiz edilmiştir. Çalışma sonucunda Covid-19 pandemisi kapsamında incelenen dönem süresince sektörler arasında negatif bir şoka en geç tepki veren sektörün inşaat sektörü olduğu tespit edilmiştir. Sanayi sektörü, perakende ticaret ve hizmet sektörü ile imalat sektörünün ise olası şoklara en hızlı tepki veren sektörler arasında olduğu bulgusuna ulaşılmıştır.

Measurement for overcapacity and its influencing factors on the construction industry-evidence from China's provincial data.

Achieving "Responsible Consumption and Production" is one of the 17 sustainable development goals set by the United Nations. Controlling overcapacity is an important guarantee in order to achieve this goal. There are many types and large quantities of raw materials in the construction industry, which easily leads to overcapacity. Studying the problems related to overcapacity in the construction industry helps to understand the formation mechanism of overcapacity in related industries. This puts forward targeted countermeasures and suggestions for the capacity resolution to achieve green and sustainable development. Based on this, this paper uses the construction industry capacity utilization data of the Shandong Province in China from 2005 to 2017. It also uses the production function method to construct a construction industry overcapacity calculation model to estimate the construction industry capacity utilization and overcapacity rate in Shandong Province. The DEA method was used to construct an extraction model of influencing factors for overcapacity. The results show that the capacity utilization ratio for Shandong Province from 2005 to 2016 was 81.98%. There was no overcapacity as a whole, but there were large fluctuations in capacity utilization for some time periods. Suggestions for optimization countermeasures were also proposed.

The effect of environmental regulation on capacity utilization in China's manufacturing industry.

How environmental regulations are used to improve manufacturing capacity is crucial to the future development of China's manufacturing industry from a quality point of view. This paper adopts a dynamic spatial panel model to empirically analyze both the effects of different types of environmental regulation policies on capacity utilization in China's manufacturing industry and their mechanisms. The results show that China's manufacturing capacity utilization varies a great deal, with improvements in technical efficiency playing the main role, although with significant regional differences. Both command-and-control and market-incentive environmental regulation are conducive to improvements in manufacturing capacity utilization; market-incentive environmental regulation, however, plays the stronger role. The above mechanisms have certain differences though. Both types of environmental regulations are able to improve manufacturing capacity utilization by improving technical efficiency and equipment utilization but the command-and-control policy tool exerts a greater effect in improving technical efficiency while the market-incentive mechanism has a greater effect in improving equipment utilization.

Measuring the capacity utilization of China’s regional construction industries considering undesirable output

As most industries in developing countries still follow a relatively rough development model, relying on expansionary investment and paying high environmental costs to promote economic growth, they also face the predicament of excess capacity. Conducting capacity utilization (CU) measurement research is the core of dealing with excess capacity. However, most existing research into capacity utilization is concentrated in the manufacturing, coal, and other industries. The quantitative evaluation of the construction industry capacity utilization is very rare, and the environmental impact factors are neglected. This study aims to develop a capacity utilization measurement index system and use it for the measurement of the construction industry capacity utilization. In doing this, based on the undesirable output perspective, it establishes a capacity utilization measurement index system that considers energy consumption and undesirable output (CO2) for the measurement of construction industry capacity utilization. Two data envelopment analysis-based (DEA-based) difference methods (the “no variable-link difference” and the “adding variable-link difference” methods) are used to measure China's construction industry capacity utilization between 2011 and 2017. The findings indicate that using the adding variable-link difference method is more accurate than the no variable-link difference method. It is also shown that the underutilization of capacity in China's construction industry in 2011–2014 is more serious, but it has improved in the past three years. In addition, with the exception of the Jiangsu and Guangxi provinces, there is underutilization of capacity in the construction industry in other provinces and cities in China. This study extends the existing knowledge system of capacity utilization, including the evaluation system, measurement, and assessment of capacity utilization, and management implications. Based on the perspective of undesirable outputs, this study lays a foundation for research into the capacity utilization in various industries by considering environmental factors. This study has practical significance for China and other developing countries to establish a nationwide capacity monitoring system.

The 2018 American Steel Tariffs: Incidence, Pass-Through, and Price Coordination

We examine the impact of the steel tariffs imposed by the United States in 2018. The tariffs were unusual in their size – 25% – and comprehensive coverage. These characteristics, as well as the concentrated nature of the U.S. industry, make the tariffs a useful instrument for measuring pass-through both in border prices and in prices charged by domestic industry. We find that the tariffs were fully absorbed by importers and led to price increases, roughly equal to the tariffs, in the American steel industry. The large domestic price increases, which began in advance of the imposition of the tariffs, are most parsimoniously explained as an instance of price coordination. The effects included large transfers from steel consumers to domestic steel producers and significant dead-weight losses. The increase in capacity utilization in the steel industry, the leading stated goal of the tariffs, came at a cost in transfers to steel producers of about $3.4 billion per percentage point of capacity utilization and a dead-weight loss of $1.1 billion per percentage point for our 15-month study period. These are not one-time costs but represent the continuing impact of the tariffs. Our results demonstrate the damage that tariffs can create even if they are temporary and are employed as a negotiating tactic.

Environmental regulation and industrial capacity utilization: An empirical study of China

China’s current economic development is faced with the two major problems of environmental pollution and production overcapacity. Environmental regulation is not only an effective means of controlling polluting emissions but is also an important factor which can affect industrial capacity utilization (ICU). For this work, 2004 to 2015 panel data from 30 provinces in China was employed to verify the evolution and spatial correlation of both environmental regulation intensity and industrial capacity utilization. The dynamic spatial panel model (DSPM) was then used to examine not only the impact of environmental regulation intensity on industrial capacity utilization but also the compliance cost effect and the innovation offset effect through which the environmental regulation intensity influences industrial capacity utilization. It was found that striking differences exist between provinces with respect to China’s environmental regulation intensities and industrial capacity utilization, with a fluctuating but rising trend emerging over time. In parallel with this, there is also a significant spatial correlation in industrial capacity utilization. The results from the DSPM show that increases in environmental regulation intensity can significantly improve industrial capacity utilization. Environmental regulations can also improve industrial capacity utilization through the innovation offset effect, although the compliance cost effect of environmental regulation not significant.

Productive efficiency and capacity utilization of sea bass grow-out culture in peninsular Malaysia

Sea bass (Lates calcarifer) is a key aquaculture species in Malaysia, produced as part of a polyculture system in cages but predominantly as a single species in ponds. The production of sea bass in Malaysia has decreased substantially since 2015. Several studies suggest disease may be the main cause for such decline, but changing economic conditions may also have played a role in this decline. In this paper, we use Data Envelopment Analysis (DEA) to examine these issues as well as identify the key drivers of efficiency and capacity utilization in the grow-out finfish industry. Our results suggest that most farms are technically efficient, but many are operating at lower levels of capacity utilization. Socio-demographic factors appear to affect pond production but less so cage production. The results suggest that the reduced output of sea bass is largely in response to changed economic conditions (output and input prices).

Modeling the Dynamic Process of the Forward Curve

In this paper, we provide adjustments for liquidity and credit risk to the forward Libor rate in order to improve accuracy of the forward rate in forecasting the 3-month Libor rate. In particular, we introduce the adjusted forward curve (AFC) that models the update in the forward curve from one period to the next. A direct modeling of the dynamic process of the forward curve facilitates the specification of adjustment factors to the forward curve, and it underscores the role of mean reversion (stationarity) in the nexus between the forward rate and the future spot rate, The AFC factors that underpin the forward curve bias are statistically relevant with p-values that are less than .00001. The upward bias in the forward curve (i.e., when the forward curve exceeds the expected future spot rate) positively correlates with the steepness of the yield curve in the AFC model. A downward bias positively correlates with the credit spread and industrial capacity utilization. Furthermore, the effect of the instantaneous forward curve on the future spot rate tempers off with time. The predictive power of the AFC model, however, hinges on the forecastability of the underlying factors. The testing indicates that all the AFC model factors have a mean reversion component. Overall, our model effectively anticipates movements in the forward curve that tend to yield a better forecast of the future spot rate.

An Adjusted Forward Curve for Spot Rate Forecasting

In this paper, we provide adjustments for liquidity and credit risk to the forward Libor rate in order to improve accuracy of the forward rate in forecasting the 3-month Libor rate. In particular, we introduce the adjusted forward curve (AFC) that models the update in the forward curve from one period to the next. A direct modeling of the dynamic process of the forward curve facilitates the specification of adjustment factors to the forward curve, and it underscores the role of mean reversion (stationarity) in the nexus between the forward rate and the future spot rate. The AFC factors that underpin the forward curve bias are statistically relevant with p-values that are less than .00001. The upward bias in the forward curve (i.e., when the forward curve exceeds the expected future spot rate) positively correlates with the steepness of the yield curve in the AFC model. A downward bias positively correlates with the credit spread and industrial capacity utilization. Furthermore, the effect of the instantaneous forward curve on the future spot rate tempers off with time. The predictive power of the AFC model, however, hinges on the forecastability of the underlying factors. The testing indicates that all the AFC model factors have a mean reversion component. Overall, our model effectively anticipates movements in the forward curve that tend to yield a better forecast of the future spot rate.

Estimating the Causal Effects of Import Controls on Price Formation in Zimbabwe

Using longitudinal individual goods price information obtained from the Zimbabwe Statistics Agency for 2016, we estimated the causal effects of using the Statutory Instrument (SI) 64 of 2016 on price formation of import competing domestic goods. The SI effectively prohibited the importation of a wide range of goods, except under licence granted by the government. To estimate the causal effects, we adopted the difference in differences specification following Card D et al (1994) to compute fully cluster-robust variance estimators, taking affected products as the treated group and all other products as non-treated or control group. Given that the SI 64 of 2016 was implemented on June 2016, our DID framework was premised on period before and after June 2016, and we computed both the unrestricted and restricted models to estimate the causal effects of import licensing requirements on the treated group. We ran simple restricted model, controlling for the category of within which an item falls into, in the standardized CPI basket i.e. whether the item is a food or non-food item. Contrary to expectations and economic theory, our robust estimates showed that the Non-Tariff Measures (NTMs) reduced overall prices of treated goods by between 1 and 10 percentage points. However, the treatment effect was statistically insignificant at both 5% and 10% implying the absence of evidence against import licensing requirement on prices of goods. Other effects such as productivity improvement, industrial capacity utilization and effects on labour market dynamics will need to be explores as well.

The Impact of Exchange Rate Dynamics on Agricultural Output Performance in Nigeria

The study investigated the possible asymmetric effect of real exchange rate dynamics on agricultural output performance in Nigeria over the period of 1981 to 2016 by collecting data from secondary sources. The study employed a combination of stationary and nonstationary variables as was found out through the ADF unit root test. Based on the Bounds test for cointegration, a long-run relationship was absent between real exchange rate and agricultural output, irrespective of specifications. Generally, the result of model estimation showed that the significant drivers of agricultural output are real exchange rate (log-levels), real appreciation and depreciation (after some lags), industrial capacity utilization rate, and government expenditure on agriculture (after some lags). ACGSF loan exerted positive and insignificant influence on agricultural output. In addition, though the effect of real appreciation was larger than that of real depreciation, the present study could not find any evidence in support of the asymmetric effect of real exchange rate dynamics on agricultural output performance in the Nigerian economy. It is therefore suggested that fiscal and monetary authorities in Nigeria should work in unison at ensuring that the full potentials of the agricultural sector are harnessed for the growth and development of the country.

AN ANALYSIS OF THE RELATIONSHIP BETWEEN HOUSEHOLD SAVINGS AND ECONOMIC GROWTH IN TURKEY

Objective- The household saving tendency has been accepted as one of the most important financial instruments in the development of the countries for hundred years. The impact of economic crisis have become much more intense, recently due to the disappearance of borders between the countiries. This situation, while increasing households' anxiety about the future, has also strengthened their saving tendencies. In Turkey, the decline in household savings, the negative effects on macroeconomic data, and the positive effects of savings on development have all come in to prominence lately. The purpose of study in this context is to investigate the effects causing increase and decrease in household savings of Turkey and to reveal their impact to economic growth. Methodology- In this study, the relationship between household savings and economic growth have been analyzed with the VAR model given in the quarterly frequency in 2002 / 1-2017 / 1 period data for the Turkish economy. The indicator of the inflation rate is selected as the TUFE price index which is accepted as the best reflector of the price movements. Concerning the interest rate, the weighted average interest rates applied to the deposit accounts of the banks are used. Financial deepening is included in the model by proportioning to M2 / GDP. The high level of this ratio indicates that the funds in the financial sector are able to meet the funding demands of the real sector. The credit volume, unemployment rate, real exchange rate, industrial production index and manufacturing industry capacity utilization rate data have been included in the study in order to make the model more sophisticated as they have considerable impact on savings. Finally, Eviews-9 program is used for econometric applications. Findings- According to the findings, there is a positive relationship between economic growth and savings in the relevant period for the Turkish economy, consistent with theoretical explanations and earlier empirical studies. However, according to the findings of the study, the most important factor determining household savings is real exchange rate. In this context, it seems difficult to increase the household savings in Turkey without stabilizing the exchange rates. The implementation of macroeconomic policies that will increase income and reduce structural vulnerabilities will raise the value of the Turkish lira in the medium to long term and will sustain the value of the Turkish lira in the short term thus will encourage savings. The impact of economic growth on savings comes after the unemployment rate, the inflation indicator, the TUFE price index and the industrial production index, representing the real sector. As a result, the sociological effects of changing consumption trends are observed. Conclusion- According to the results and inferences of the study; it might be advisable to implement policies that will mobilize market dynamics to improve savings at micro-scale in policy preferences for increased savings. In general, it might be worthy of recommendation to prioritize structural policies that might influence household investment habits. For example, awareness-raising projects regarding the benefits of saving can be developed in order to increase household savings. The saving culture could be explained via cooperation in technology and social media in order to disseminate the implementation of the project to the public. Trainings can be provided to enhance the financial literacy level of the households and increasing their cognizance with regard to the subject. It can be argued that dividing the increases in household incomes into conscious spending and individual pension systems on credit cards will play an important role in expanding the savings base and rendering the savings sustainable.

Market segmentation and industry overcapacity considering input resources and environmental costs through the lens of governmental intervention.

The problems with China's regional industrial overcapacity are often influenced by local governments. This study constructs a framework that includes the resource and environmental costs to analyze overcapacity using the non-radial direction distance function and the price method to measure industrial capacity utilization and market segmentation in 29 provinces in China from 2002 to 2014. The empirical analysis of the spatial panel econometric model shows that (1) the industrial capacity utilization in China's provinces has a ladder-type distribution with a gradual decrease from east to west and there is a severe overcapacity in the traditional heavy industry areas; (2) local government intervention has serious negative effects on regional industry utilization and factor market segmentation more significantly inhibits the utilization rate of regional industry than commodity market segmentation; (3) economic openness improves the utilization rate of industrial capacity while the internet penetration rate and regional environmental management investment have no significant impact; and(4) a higher degree of openness and active private economic development have a positive spatial spillover effect, while there is a significant negative spatial spillover effect from local government intervention and industrial structure sophistication. This paper includes the impact of resources and the environment in overcapacity evaluations, which should guide sustainable development in emerging economies.

Meaning, Nature and Scope of Conflict in Nigerian Workplaces

Conflict is a pervasive reality which resonates and occurs globally in diverse forms. UNDP (2014) noted that conflict and a sense of personal insecurity have pervasive adverse impacts on human development and leave billions of people living in precarious conditions. Conflicts have short and long term impacts which affect both conflicting and non-conflicting parties in different ways. This is most poignant at work, where workplace conflicts can escalate, inflict enormous harm on firms, employers, managers, employees, unions etc and pose a great threat to societal as well as national stability and progress. Hence, it becomes expedient for stakeholders at work to promptly and amicably settle conflicts whenever it erupts. It is against this backdrop that this paper calls for synergy between workplace parties and institution in developing accessible and transparent mechanisms for resolving workplace conflicts in Nigeria, given the complexities of our economy and low industrial capacity utilization in private and public enterprises.

Globalization And The Automobile Sector of Nigeria (1990-2015)

This study examined the influence of globalization on automobile sector of Nigeria (1990-2015). The study identified obsolete technology, negative effect of trade openness,inadequate manufacturing infrastructure, low capacity utilization and industrial production as the problems facing Nigeria automobile sector. In view of the above problems, the study sought toexamine the extent of relationship between Foreign Direct Investments (FDI) and manufacturing output of automobile industry, to ascertain the value added by Information and Communication Technology (ICT) penetration on employment in the automobile industry and to determine the influence of trade openness on capacity utilization in the automobile industry. The study was anchored on theory of globalization by Glovanni (2001). Secondary data were sourced from Central Bank of Nigeria statistical bulletin and publications from the National Bureau of Statistics. Ordinary Least Square technique was used for the study. The result revealed that Manufacturing Output has a significant effect on automobile industry; Employment has a positive relationship with Foreign Direct Investment, Information and Communication Technology (ICT) penetration and Trade Openness. While Capacity Utilization has a positive relationship with Industrial Production and Technology Transfer. The study concludes that for a country to maximally enjoy the benefits and maximize the risks associated with globalization, it has to develop and strength its capacity to timely identify both internal and external shocks, and to initiate, design and implement appropriate policies to forestall their destabilizing effects. It is on the basis of the foregoing that Nigeria can be put on the right track in the race towards sustainable development. The study recommended that Nigeria should take a second look at her membership of the WTO and then selectively engage in those trades that will not jeopardize her national interest, most especially the imperative need to protect Nigeria