Determinants of Capacity Utilization of Firms: A Comparative Analysis of Developing and Developed Countries

Authors

Muhammad Zahid(1) Muhammad Zahid Affiliation MPhil Economics, Department of Economics, Government College University Faisalabad, Faisalabad, Pakistan Other articles by this author , Muhammad Faraz Riaz(2) Muhammad Faraz Riaz Corresponding author Affiliation Assistant Professor, Department of Economics, Government College University Faisalabad, Faisalabad, Pakistan Email addressfaraz.riaz@gcuf.edu.pk Other articles by this author , Anam Shehzadi(3) Anam Shehzadi Affiliation Lecturer, Department of Economics, Government College University Faisalabad, Faisalabad, Pakistan Other articles by this author , Sadia Ali(4) Sadia Ali Affiliation Assistant Professor, Department of Economics, Government College University Faisalabad, Faisalabad, Pakistan Other articles by this author

  1. MPhil Economics, Department of Economics, Government College University Faisalabad, Faisalabad, Pakistan
  2. Assistant Professor, Department of Economics, Government College University Faisalabad, Faisalabad, Pakistan
  3. Lecturer, Department of Economics, Government College University Faisalabad, Faisalabad, Pakistan
  4. Assistant Professor, Department of Economics, Government College University Faisalabad, Faisalabad, Pakistan

https://doi.org/10.36923/jcmi.v5i2.603

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Abstract

This paper employs data from more than 100 World Bank Enterprise Surveys of different developed and developing countries to analyze the determinants of capacity utilization in firms between 2007-2023. Appling Tobit model, the results show that while developed countries have more access to capital, technology, reliable electricity, better management, and sound infrastructure with fewer challenges, In developing countries problems such as energy constraints, informal competition limit capacity utilization of firms. Whereas the ownership concentration has mixed effects. The analysis also highlights the importance availability to finance, digital readiness, innovation, and choice of destination market. Results also highlight that access to finance and inadequate supply of workers are the biggest challenges the firms face in the wake of capacity utilization.

Article information

Keywords
firmscapacity utilizationdeveloped countriesdeveloping countries
Section
Articles
Issue
Vol. 5 No. 2 (2024)
Submitted
November 29, 2024
Accepted
December 27, 2024
Published
December 27, 2024
Corresponding author
Muhammad Faraz Riaz
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