On the measurement of capacity utilisation and coast efficiency: a non-parametric approach at firm level

In this paper we evaluate the inefficiency generated by an inadequate structure of the fixed inputs and by the difficulty to adjust them in the short-run in a sample of Romanian firms in the chemical industry over the period 1996–1997. We use Data Envelopment Analysis and apply this methodology in an innovative setting using a cost analysis instead of the technical efficiency approach. The results show inefficiency in most of the cases due to a low degree of capacity utilization.