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Estimation comparison of the capacity utilisation at constant and non-constant returns to scale: the case of the Tunisian manufacturing sector

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  • Kamel Helali
  • Maha Kalai
  • Mohamed Siala

Abstract

The capacity utilisation is a key indicator of a country's economic performance that measures the contribution of assets to the achievement of the output. Measurements of productivity growth are sensitive to the changes of this rate. Therefore, the existence of a capacity utilisation measure is not only useful to the formulation of the economic policy but also to the development of appropriate empirical measures to assess the national and sectoral economic performance. In Tunisia, like in any other developing country, the need to ensure a strong and sustainable economic growth has become a solution to many social problems that mortgage the country's future. From the estimated results of the capacity utilisation, we notice a significant under-utilisation of production capacity in the manufacturing sector. In addition, it seems that the economy, which is represented by a policy of inefficient technology resulting in non-constant returns to scale (NCRS) throughout the study period 1970-2008.

Suggested Citation

  • Kamel Helali & Maha Kalai & Mohamed Siala, 2016. "Estimation comparison of the capacity utilisation at constant and non-constant returns to scale: the case of the Tunisian manufacturing sector," International Journal of Computational Economics and Econometrics, Inderscience Enterprises Ltd, vol. 6(1), pages 56-70.
    • Handle: RePEc:ids:ijcome:v:6:y:2016:i:1:p:56-70
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    Cited by:

    1. Kamel Helali, 2018. "A New Assessment of the Non-Accelerating Inflation Rate of Unemployment and Capacity Utilization in Tunisia," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 21(68), pages 54-77, June.

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