Physical capital

About: Physical capital is a research topic. Over the lifetime, 12729 publications have been published within this topic receiving 520124 citations.

Internal Capital Markets and the Competition for Corporate Resources

Abstract: This article examines the role of corporate headquarters in allocating scarce resources to competing projects in an internal capital market Unlike a bank, headquarters has control rights that enable it to engage in "winner-picking"-the practice of actively shifting funds from one project to another By doing a good job in the winner-picking dimension, headquarters can create value even when it cannot help at all to relax overall firm-wide credit constraints The model implies that internal capital markets may sometimes function more efficiently when headquarters oversees a small and focused set of projects THIS ARTICLE ANALYZES THE process by which internal capital markets channel limited resources to different uses inside a company In so doing, it seeks to address two related sets of questions First, what is the fundamental economic rationale for creating an internal capital market? That is, under what circumstances can it make sense to combine several technologically distinct projects under one roof, and have them seek funding from corporate headquarters, as opposed to setting them up as stand-alone companies that each raise external financing on their own? Second, given this rationale, what is the optimal size and scope of an internal capital market? Should headquarters be involved in funding a large number of projects, or just a few? And should these projects be unrelated to one another, or in similar lines of business? The answers to both sets of questions flow from the insight that in a credit-constrained setting-where not all positive NPV projects can be financed headquarters can create value by actively reallocating scarce funds across projects For example, the cash flow generated by one division's activities may be taken and spent on investment in another division, where the returns are higher Or alternatively, one division's assets may be used as collateral to raise financing that is then diverted to the other division Simply put, individual projects must compete for the scarce funds, and headquarters' job is to pick the winners and losers in this competition

Human Capital, Fertility, and Economic Growth

Abstract: Our model of growth departs from both the Malthusian and neoclassical approaches by including investments in human capital We assume, crucially, that rates of return on human capital investments rise, rather than, decline, as the stock of human capital increases, until the stock becomes large This arises because the education sector uses human capital note intensively than either the capital producing sector of the goods producing sector This produces multiple steady scares: an undeveloped steady stare with little human capital, low rates of return on human capital investments and high fertility, and a developed steady stats with higher rates of return a large, and, perhaps, growing stock of human capital and low fertility Multiple steady states mean that history and luck are critical determinants of a country's growth experience

Intellectual capital and business performance in Malaysian industries

Abstract: The purpose of this empirical study is to investigate the three elements of intellectual capital, i.e. human capital, structural capital, and customer capital, and their inter‐relationships within two industry sectors in Malaysia. The study was conducted using a psychometrically validated questionnaire which was originally administered in Canada. The main conclusions from this particular study are that: human capital is important regardless of industry type; human capital has a greater influence on how a business should be structured in non‐service industries compared to service industries; customer capital has a significant influence over structural capital irrespective of industry; and finally, the development of structural capital has a positive relationship with business performance regardless of industry. The final specified models in this study show a robust explanation of business performance variance within the Malaysian context which bodes well for future research in alternative contexts.

Family Investments in Human Capital: Earnings of Women

Abstract: It has long been recognized that consumption behavior represents mainly joint household or family decisions rather than separate decisions of family members. Accordingly, the observational units in consumption surveys are "consumer units," that is, households in which income is largely pooled and consumption largely shared. More recent is the recognition that an individual's use of time, and particularly the allocation of time between market and nonmarket activities, is also best understood within the context of the family as a matter of interdependence with needs, activities, and characteristics of other family members. More generally, the family is viewed as an economic unit which shares consumption and allocates production at home and in the market as well as the investments in physical and human capital of its members. In this view, the behavior of the family unit implies a division of labor within it. Broadly speaking, this division of labor or "differentiation of roles" emerges because the attempts to promote family life are necessarily constrained by complementarity and substitution relations in the household production process and by comparative

The Neoclassical Revival in Growth Economics: Has It Gone Too Far?

Abstract: In our view there has been a "Neoclassical Revival" in growth economics spurred by the empirical findings of Mankiw, Romer, and Weil (1992), Barro and Sala-i-Martin (1995), and Young (1994 and 1995). By this we mean a revival of the neoclassical growth model-which features a common level of productivity but different levels of human and physical capital across countries-as a viable candidate for explaining the major part of country differences in levels and growth rates of output per worker. Marshaling existing evidence from the labor literature on the returns to schooling and experience, we construct new measures of human capital across countries. We find that productivity differences are the dominant source of the large international dispersion in levels and growth rates of output per worker. We conclude that, although models that focus on physical and human capital are clearly important, research needs to be re-focused on explaining the causes of productivity differences across countries.