Capacity utilization, factor substitution, and productivity growth in Canadian food processing sector

Abstract The food processing industry has been confronted with unprecedented challenges as the costs of raw materials have risen rapidly, owing in part to increased use grains for ethanol. It is critical comprehend how these trends affect and potential coping techniques. This study estimates capacity utilization, which a measurement that well-suited identify input prices productivity short-run. results show utilization decreased significantly after year 2005 when skyrocketed. TFP growth also slowed because this. According estimated elasticities, little deal cost challenge through factor substitution. Another conclusion positive elasticity respect materials. Because it related induced capital stock adjustment, only achievable long run, this an indicator will be affected long-run.