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Direct and Indirect Measures of Capacity Utilization: A Nonparametric Analysis of U.S. Manufacturing
The authors measure the capacity output of a firm as the maximum amount producible by a firm given a specific quantity of the quasi-fixed input and an overall expenditure constraint for its choice of variable inputs. We compute this indirect capacity utilization measure for the total manufacturing sector in the US as well as for a number of disaggregated industries, for the period 1970-2001.
Link
http://www.econ.uconn.edu/working/2005-36.pdf