Kerschbamer, Rudolf; Tournas, Yanni - C.E.P.R. Discussion Papers - 2000
This paper analyses the impact of variations of product demand on the amount of internal slack in multi-plant firms in …. In such a model, the amount of slack in the firm is shown to be pro-cyclical. Indeed, as capacity constraints become … tighter in booms, slack increases in booms, because the power of in-house competition is reduced, while the opposite is true …