Absorptive Capacity: When is too much capital still not enough?
Posted in Analysis, Market Comments, Social Observations on Aug 25th, 2010
From small start-ups, to foreign aid and the housing crisis, absorptive capacity can impact capital allocation decisions in often unpredictable ways. Identifying the issues underlying absorptive capacity can assist us both as individual economic agents and at an aggregate level. This post reviews three examples where absorption capacities can adversely affect economic outcomes and how pragmatic awareness can assist in reaching a better solution.
