Quantifying the allocative efficiency of capital: The role of capital utilization

IF 4.1 2区经济学 Q1 BUSINESS, FINANCE

Journal of Monetary Economics Pub Date : 2025-08-16 DOI:10.1016/j.jmoneco.2025.103822

Poorya Kabir , Eugene Tan , Ia Vardishvili

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引用次数: 0

Abstract

Higher dispersion of log average revenue product of capital (ARPK) is commonly associated with lower capital allocative efficiency. We show this is a result of the assumption that capital utilization is fixed. However, when capital utilization is endogenous, higher capital allocative efficiency is associated with lower dispersion of log average revenue product of capital services (log difference between revenue and utilized capital), not ARPK. Furthermore, contrary to the standard relationship, increases to capital allocative efficiency is associated with higher ARPK dispersion when such improvements arise from greater utilization flexibility. We provide evidence supporting the mechanism and demonstrate counterfactuals where allocative efficiency gains are accompanied by higher ARPK dispersion. Lastly, we apply our framework to study the impact of a capital market liberalization reform in India. We estimate the reform improved allocative efficiency by 0.04%, but counterfactual analysis neglecting the response of utilization would have concluded efficiency gains of 5.25%.

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资本配置效率的量化：资本利用的作用

对数平均资本收益积（ARPK）的分散性越高，资本配置效率越低。我们表明，这是假设资本利用是固定的结果。然而，当资本利用是内生的时，较高的资本配置效率与资本服务的对数平均收益乘积（收益与使用资本之差的对数）的分散度较低相关，而与ARPK无关。此外，与标准关系相反，当资本配置效率的提高源于更大的利用灵活性时，这种提高与更高的ARPK分散有关。我们提供了支持这一机制的证据，并证明了配置效率的提高伴随着更高的ARPK分散的反事实。最后，我们运用我们的框架来研究印度资本市场自由化改革的影响。我们估计改革将使配置效率提高0.04%，但忽略利用响应的反事实分析将得出效率提高5.25%的结论。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Monetary Economics Multiple-

CiteScore

7.20

自引率

4.90%

发文量

审稿时长

74 days

期刊介绍： The profession has witnessed over the past twenty years a remarkable expansion of research activities bearing on problems in the broader field of monetary economics. The strong interest in monetary analysis has been increasingly matched in recent years by the growing attention to the working and structure of financial institutions. The role of various institutional arrangements, the consequences of specific changes in banking structure and the welfare aspects of structural policies have attracted an increasing interest in the profession. There has also been a growing attention to the operation of credit markets and to various aspects in the behavior of rates of return on assets. The Journal of Monetary Economics provides a specialized forum for the publication of this research.