NA/85 Accounting for the use of financial capital as an input in production; with an application to multi-factor productivity change estimation

Keuning, Steven J. and Ted Reininga (1997).It is increasingly acknowledged that the financial structure of a firm is an important determinant of its economic activity. Therefore, the use of financial capital should be seen as a separate input in the production process. This paper attempts to operationalize a meso-economic measurement of financial capital inputs in production and shows the consequences for the estimation of multi-factor productivity change. This approach establishes a much closer relationship of macro-economic accounting and analysis to business economics