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THE ROLE OF FINANCIAL CAPITAL IN PRODUCTION
Author(s) -
Keuning Steven
Publication year - 1999
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.1999.tb00358.x
Subject(s) - economics , production (economics) , work (physics) , capital (architecture) , value (mathematics) , set (abstract data type) , finance , accounting , microeconomics , macroeconomics , programming language , archaeology , machine learning , computer science , engineering , history , mechanical engineering
It is increasingly acknowledged that the financial structure of a firm is an important determinant of its production costs. This paper argues that the use of a firm's liabilities should be seen as a separate input in the production process. At the same time, the input of non‐financial assets is limited to the value that is used up during the reference period. The paper elaborates on these ideas and shows their use in empirical work. It is concluded that the approach set out in this paper establishes a much closer relationship of general economic accounting and analysis to business economics.