EXPLORING SOURCES OF PRODUCTIVITY GAINS AND THEIR FINANCIAL IMPLICATIONS: A COMPARISON OF AGGREGATE AND DISAGGREGATE APPROACHES

This paper explores links between productivity gains and financial performance. At the outset, the link might seem simple: productivity lowers unit costs of production, therefore it would be expected to improve financial performance. But it is not so simple. Productivity compares quantities of output compared to quantities of inputs, whereas financial performance measures compare revenues from output to expenditures on inputs. These are not identical measures. It is possible to establish a link between aggregate total factor productivity (TFP) and aggregate financial performance (total revenues compared to total costs) by incorporating input and output price changes. But these 'bottom line' performance measures do not reveal much about the sources or components of the productivity and/or financial improvement. To do this requires disaggregation of these bottom line performance measures. This is the focus of this paper: to explore ways of identifying underlying components of increased performance both in productivity and financial measures, and whether or not links can be established between them.

Language

  • English

Media Info

  • Features: Appendices; Figures; References;
  • Pagination: p. 198-214

Subject/Index Terms

Filing Info

  • Accession Number: 00797134
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Aug 14 2000 12:00AM