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Including capital input within total productivity measurement
Author(s) -
Stainer Alan I.
Publication year - 1991
Publication title -
journal of corporate accounting and finance
Language(s) - English
Resource type - Journals
eISSN - 1097-0053
pISSN - 1044-8136
DOI - 10.1002/jcaf.3970030210
Subject(s) - productivity , capital (architecture) , economics , fixed capital , measure (data warehouse) , industrial organization , capital formation , macroeconomics , microeconomics , computer science , financial capital , profit (economics) , archaeology , database , history
In an environment of inflationary conditions and rapid technological change, the state of the art of total productivity measurement is reviewed—focusing on the importance of capital input along with the more common materials and labor factors. The basis for capital input measurement is discussed and evaluated, including the concepts of economic, deprival, replacement, and net realizable values. The weaknesses of using historic cost are considered and a replacement cost system is elaborated with the capital input shown at base‐year prices. Examples are provided to illustrate how a more relevant measure of capital input can help improve strategic decisions based on total productivity.