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An Estimation of the Potential Utilization in Iranian Pharmaceutical Industry Involved in the Stock Exchange, 2008-2012



Annabi M1 ; Kebriaeezadeh A2, 3 ; Mohammadi T4 ; Shoshtari SNM5 ; Dorkoosh FA6 ; Pourreza A7 ; Heydari H8
Authors
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Authors Affiliations
  1. 1. Department of Pharmacoeconomics and Pharmaceutical administration, Faculty of Pharmacy, Tehran University of Medical Sciences, Tehran, Iran
  2. 2. Head of the Center of Economic Research and Drug Management, Faculty of Pharmacy, Tehran University of Medical Sciences, Tehran, Iran
  3. 3. Pharmaceutical Management and Economics Research Center, Tehran University of Medical Sciences, Iran
  4. 4. Department of Theoretical Economics, Faculty of Economics, Allameh Tabataba'i University, Tehran, Iran
  5. 5. Department of Industrial Engineering and Management System, Faculty of Industrial Engineering, Amirkabir University of Technology, Tehran, Iran
  6. 6. Department of Pharmacoeconomics and Pharmaceutical Administration, Faculty of Pharmacy, Tehran University of Medical Sciences, Tehran, Iran
  7. 7. Department of Health Management and Economics, School of Public Health, Tehran University of Medical Sciences, Tehran, Iran
  8. 8. Department of Economics, Faculty of Economics and Management, Tarbiat Modares University, Tehran, Iran

Source: Iranian Journal of Pharmaceutical Research Published:2017

Abstract

The aim of this study was to measure the potential of production and the capacity used in the pharmaceutical industry. Capacity use is the actual production rate to the potential output, which reflects the gap between actual production and production capacity. Through econometric methods, translog cost function in the short run along with functions of share cost of production factors is estimated through seemingly unrelated repeated regression (SURE) as a multivariate regression analysis provided by zeller. During the study the capacity used is decreasing. The capacity used, which calculated by weighted average, also decreased and the amount during the study period is much less than the simple average of the industry. Average capacity utilization in the industry over five years of study is equal to 57% while the average capacity used calculated by the weighted of industry average is 37%. To enhance the economic potential requires a proper use of resources, creation of favorable economic structure and productivity of the industry. Due to the large amount of unused capacity in the pharmaceutical industry there is no need to invest anymore unless in new grounds and it is obvious that more investment will change using capacity. © 2017 by School of Pharmacy Shaheed Beheshti University of Medical Sciences and Health Services.