Skip to main content
Log in

Nonparametric Measures of Capacity Utilization of the Tunisian Manufacturing Industry: Short- and Long-Run Dual Approach

  • Published:
Journal of the Knowledge Economy Aims and scope Submit manuscript


This paper tried to develop a nonparametric method of obtaining the minimum of the long-run average total cost curve of a firm to define its production capacity. It provided a benchmark for the measurement of the capacity utilization rate at the observed output level of the industry. In the case of the long-run constant returns to scale, the minimum of the short-run average total cost curve is determined to measure the short-run capacity utilization. When applied empirically, we measured the annual capacity utilization rates of the Tunisian manufacturing industry and its six sectors over the period 1961–2014. In addition, we developed a nonparametric analysis based on the data envelopment analysis methodology for the quasi-fixed capital factor of the short-run average total cost curve with variable returns to scale using an iterative search procedure. From the estimated results of the capacity utilization, we noticed a significant under-utilization of the production capacity in the manufacturing sector.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Subscribe and save

Springer+ Basic
EUR 32.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or Ebook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5
Fig. 6

Similar content being viewed by others


  • Achy, L. (2011). Tunisia’s economic challenges. Carnegie Middle East Center: Lebanon.

    Google Scholar 

  • Afriat, S. (1972). Efficiency estimation of production functions. Int Econ Rev, 13(3), 568–598.

    Article  Google Scholar 

  • Cassels, J. M. (1937). Excess capacity and monopolistic competition. Q J Econ, 51(3), 426–443.

    Article  Google Scholar 

  • Charnes, A., Cooper, W. W., & Rhodes, E. (1978). Measuring the efficiency of decision making units. Eur J Oper Res, 2, 429–444.

    Article  Google Scholar 

  • Cook, W. D., Tone, K., & Zhu, J. (2014). Data envelopment analysis: prior to choosing a model. Omega, 44, 1–4.

    Article  Google Scholar 

  • Färe, R., Grosskopf, S., & Kokkelenberg, E. (1989). Measuring plant capacity, utilization, and technical change: a nonparametric approach. Int Econ Rev, 30, 655–666.

    Article  Google Scholar 

  • Färe, R., Grosskopf, S., & Lovell, C. A. K. (1994). Production frontiers. Cambridge, MA: Cambridge University Press.

  • Farrell, M. J. (1957). The measurement of productive efficiency. J R Stat Soc Ser A, 120(3), 253–290.

    Article  Google Scholar 

  • Frisch, R. (1965). Theory of production. Dordrecht-Holland: D. Reidel Publishing Company.

    Book  Google Scholar 

  • Ghali, S. (2012). Tunisian exports’ sophistication. Internal working paper. Tunis: World Bank.

    Google Scholar 

  • Ghali, S., & Rezgui, S. (2008). FDI contribution to technical efficiency in the Tunisian manufacturing sector. Working Papers 421, Economic Research Forum, revised August 2008.

  • Hanoch, G., & Rothschild, M. (1972). Testing the assumptions of production theory: a nonparametric approach. J Polit Econ, 80(2), 256–275.

    Article  Google Scholar 

  • Johansen, L. (1968). Production functions and the concept of capacity. Recherches Recentes sur la Fonction de Production, Collection. Economie et Mathematique et Econometrie, 2, 46–72.

    Google Scholar 

  • Jouini, Elyès, 2014. Tunisie L’espoir: mode d’emploi pour une reprise. Tunis: Cérès éditions.

  • Kumru, M. (2011). Determining the capacity and its level of utilization in make-to-order manufacturing: a simple deterministic model for single-machine multiple-product case. J Manuf Syst, 30, 63–69.

    Article  Google Scholar 

  • Meddeb, R. (2011). Ensemble: construisons la Tunisie de demain, Modernité, solidarité et performance, Octobre 2011. Tunis: Action et Développement Solidaire.

    Google Scholar 

  • Prior, D. (2003). Long- and short-run non-parametric cost frontier efficiency: an application to Spanis savings banks. Journal of Banking and Finance, 27, 655–671.

    Article  Google Scholar 

  • Prior, D., & Filimon, N. (2002). On the measurement of capacity utilisation and cost efficiency: a non-parametric approach at firm level. Pesquisa Operacional, 22(2), 247–263.

    Article  Google Scholar 

  • Ray, S. C. (2002). Nonparametric measures of capacity utilization: a dual approach. Connecticut: University of Connecticut Working Paper, 2002-35, October.

    Google Scholar 

  • Ray, S. C. (2015). Nonparametric measures of scale economies and capacity utilization: an application to U.S. manufacturing. Eur J Oper Res, 245(2), 602–611.

    Article  Google Scholar 

  • Ray, S. C., & C. Lei. (2010). Data envelopment analysis for performance evaluation: a child’s guide. Indian Economic Review, 79–124.

  • Ray, S. C., Mukherjee, K., and Wu, Y. (2005). Direct and indirect measures of capacity utilization: a nonparametric analysis of U.S. Manufacturing. Department of Economics Working Paper Series, Working Paper 2005–36, May.

  • World Bank. (2014). La Révolution Inachevée : Créer des opportunités, des emplois de qualité et de la richesse pour tous les Tunisiens, TUNISIE: Revue des politiques de développement, Rapport No. 86179-TN, May 2014.

Download references

Author information

Authors and Affiliations


Corresponding author

Correspondence to Maha Kalai.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Kalai, M. Nonparametric Measures of Capacity Utilization of the Tunisian Manufacturing Industry: Short- and Long-Run Dual Approach. J Knowl Econ 10, 318–334 (2019).

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI:


JEL Classification