A New Input‐Oriented Plant Capacity Notion: Definition and Empirical Comparison

Abstract

Abstract Starting from the existing output‐oriented plant capacity measure, this paper proposes a new input‐oriented plant capacity measure. Furthermore, we empirically illustrate both input‐oriented and output‐oriented decompositions of technical efficiency integrating these technical concepts of capacity utilization. In particular, we pay attention to the impact of convexity of the technology on both input‐oriented and output‐oriented plant capacity measures.