PRODUCTIVITY ACCOUNTING AND BUSINESS FINANCIAL PERFORMANCE: A REVIEW OF CURRENT EVIDENCE
PRODUCTIVITY ACCOUNTING AND BUSINESS FINANCIAL PERFORMANCE: A REVIEW OF CURRENT EVIDENCE

Summary/Abstract: This article reviews Grifell-Tatjé and Knox Lovell (2015) and supplements it with theoretically based empirical research. The relevance of productivity accounting resides in its capacity to disjoin the effects of output change and price alteration on business financial performance. Productivity accounting supplies the information and an analytical scheme within which economic investigation may determine the contributions of the main determinants of output change. The character of price determination is instrumental in productivity accounting. The capacity to detect a short-run link between output and profit at the firm level depends on whether standard accounting data integrate, or may be altered to include, information necessitated to assess output change. Although productivity is not present in the accounts, accountants undoubtedly consider it.

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