Capacity utilisation and corporate restructuring: a comparative study of the US, UK and other EU countries

This paper compares and contrasts capacity utilisation in the manufacturing sectors of the US, UK and other EU countries over three decades. It argues that corporate governance and the pressures of globalisation have led to a tighter capacity stance in the UK but not generally in the US or Europe. The paper further explores the nature of the UK experience, in particular, the rival theories that efficiency in capital use has increased versus the view that firms have simply tightened their capacity stance in line with higher hurdle rates of return. The evidence of the paper supports the view that UK firms adopted a 'submissive' response to the pressures of globalisation by shutting capacity and retreating from new investment. Copyright 2005, Oxford University Press.