At this point it is useful to review the current state of empirical knowledge about the long-run determinants of capital utilization in light of both the theory developed in Part I and the analysis in the preceding chapter. Given the long-run emphasis of our analysis, cross-sectional studies rather than time-series studies constitute the appropriate focus of our review. Because a major aim of this survey is to provide a perspective from which to view the empirical measurements and the results presented in the next two chapters, we shall discuss these cross-sectional studies from the point of view of testing propositions about the long-run determinants of capital utilization. Therefore, comments on descriptive material in these studies and comments on solely descriptive studies will be postponed until Chapter 8.

All but two of the studies under consideration are based on data for individual plants. The two exceptions are the early empirical studies on the subject (Marris 1964, Chapter 7; Winston 1971). Because these two studies illustrate the general nature of the problems faced by subsequent investigators, they will be discussed first. The remaining studies can be placed into the following two categories: those based on the use of continuous measures of utilization and those based on discrete measures of utilization. Because the choice of different utilization measures leads to some important differences between the two sets of studies, the two categories will be considered separately.