This study delves into the origins of excess capacity by examining the reactions of capital, labor, and capital … intensity. To achieve this, we have employed a novel three-layered production function model, estimating the elasticity of … manufacturing plant realities. Ultimately, we recommend that policymakers address the issue of excess capacity by stimulating the …

' incentives to undertake large investments as it prevents reserve capacity building. This paper shows that if capacity utilization …. However, previous studies have underestimated the lumpiness. Their assumption of constant capital utilization reduces firms … fixed capital adjustment costs, heterogeneous firms, variable utilization, and aggregate technology shocks, I numerically …

by a combination of increasing returns and increased utilization ofthe production factors. To avoid stock-outs, firms … adjustmentvery well. Although inputs adjust slowly, production responds quickly to the demand shock andthis adjustment is explained …