Capital intensity

Amount of fixed capital employed, measured per unit of labor or per unit of sales (the level of sales generated by a given amount of capital.) and thus an indicator of the capital endowment of a company, an industry or the economy as a whole. – High capital intensity (a – company [steelwork], – project [retaining dam, barrage] or – sector of activity [infirmary] requires an unusually high quantity of fixed assets to be able to operate) creates a significant barrier to entry for competitors. For this reason, the relevant sectors – steel production, electricity, infrastructure such as hospitals, roads or airports – are particularly under the scrutiny of the antitrust authorities. In addition, such companies and industries are generally highly dependent on the capital market and are considered to be very sensitive to interest rates. – See investment, capital, capital ratio, capital stock, capital turnover, leasing business. – Deutsche Bundesbank Monthly Report of April 2012, p. 25 f. (projection of capital intensity up to 2020; overview).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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