scholarly journals On the Production Function with Variable Elasticity of Factor Substitution

2018 ◽  
Author(s):  
Constantin Chilarescu
Keyword(s):  
Production Function ◽  
Factor Substitution ◽  
Elasticity Of Factor Substitution

scholarly journals How to Explain When the ES Is Lower Than One? A Bayesian Nonlinear Mixed-Effects Approach

2020 ◽  
Vol 13 (2) ◽  
pp. 21 ◽  
Author(s):  
Nguyen Ngoc Thach
Keyword(s):  
Production Function ◽  
Mixed Effects ◽  
Output Growth ◽  
Nonlinear Mixed Effects ◽  
Data Set ◽  
Constant Elasticity ◽  
Constant Elasticity Of Substitution ◽  
Mh Algorithm ◽  
Factor Substitution ◽  
Elasticity Of Factor Substitution

Most studies in Vietnam use the Cobb-Douglas production function and its modifications for economic analysis. Extremely rigid presumptions are a main weak point of this functional form, particularly if the elasticity of factor substitution (ES) is equal to one, which hides the role of the ES for economic growth. The CES (constant elasticity of substitution) production function with more flexible presumptions, concretely its ES, is not unitary, and has been used more and more widely in economic investigations. So, this study is conducted to estimate the average ES through the specification of an aggregate CES function for the Vietnamese nonfinancial enterprises. By performing Bayesian nonlinear mixed-effects regression via Random-walk Metropolis Hastings (MH) algorithm, based on the data set of the listed nonfinancial enterprises of Vietnam, the author found that the CES function estimated for the researched enterprises has an ES lower than one, i.e., capital and labor are complimentary. This finding shows that Vietnamese nonfinancial enterprises can confront a downward trend of output growth.

RATE OF AND BIAS TO TECHNICAL CHANGE UNDER A REGIME OF ALMOST HOMOGENEITY OF THE PRODUCTION FUNCTION

2000 ◽  
Vol 4 (3) ◽  
pp. 415-421
Author(s):  
Michael J. Panik
Keyword(s):  
Production Function ◽  
Technical Change ◽  
Output Growth ◽  
Aggregate Output ◽  
Factor Substitution ◽  
Elasticity Of Factor Substitution ◽  
The Individual

This paper utilizes the concept of almost homogeneity to obtain a generalization of the elasticity of factor substitution. From this, an expression for the bias to technical change is derived that explicitly includes the individual degrees of input homogeneity. It is shown that the relative values of these homogeneity parameters can affect the magnitude and direction of the factor-saving bias to technical change. These parameters also influence the size of the residual or unexplained component of aggregate output growth.

scholarly journals THE ELASTICITY OF SUBSTITUTION AS AN ENGINE OF GROWTH

2010 ◽  
Vol 14 (5) ◽  
pp. 617-628 ◽  
Author(s):  
Theodore Palivos ◽  
Giannis Karagiannis
Keyword(s):  
Lower Bound ◽  
Production Function ◽  
Growth Models ◽  
Elasticity Of Substitution ◽  
Necessary Condition ◽  
Marginal Product ◽  
General Production ◽  
Factor Substitution ◽  
Elasticity Of Factor Substitution

This paper characterizes the elasticity of factor substitution in one-sector convex growth models with a general production function. It shows that an elasticity of substitution that is asymptotically greater than unity is a sufficient (but not a necessary) condition for the existence of a lower bound on the marginal product of capital, which in turn can lead to unbounded endogenous growth. Hence, an elasticity of substitution that eventually becomes greater than unity can counteract the role of diminishing returns to capital. This renders factor substitution a powerful engine of growth.

Elasticity of factor substitution and driving factors of energy intensity in China’s industry

2018 ◽  
Vol 30 (3) ◽  
pp. 385-407 ◽  
Author(s):  
Feng Wang ◽  
Yijie Jiang ◽  
Wulin Zhang ◽  
Fang Yang
Keyword(s):  
Technical Progress ◽  
Manufacturing Industry ◽  
Energy Intensity ◽  
Industrial Sector ◽  
Driving Factors ◽  
Rapid Expansion ◽  
Intermediate Input ◽  
Translog Cost Function ◽  
Factor Substitution ◽  
Elasticity Of Factor Substitution

Based on the translog cost function and factor substitution theory, the input and output data from China’s industrial sector and the three sub-sectors during the period 1984–2011 are firstly used to calculate substitution elasticity among capital, labor, energy, and intermediate input. And then from the perspective of factor substitution, the driving factors of energy intensity in China’s industry are explored. The main findings introduced in this paper are listed as follows: firstly, the production of China’s industrial sector is sensitive to changes of energy and labor prices; secondly, except the complementary relationships between energy and labor in the manufacturing industry, and between energy and intermediate input in electricity, gas, and water industry, substitution relationships exist among all other factors; thirdly, the budget constraint of energy consumption is the most effective impetus to the reduction of energy intensity in industrial sector, and factor substitution especially the substitution of capital and labor for energy has an important role in the reduction of energy intensity; fourthly, the rapid expansion of economic scale causes output effect to become the biggest factor of impeding the reduction of energy intensity; fifthly, technical progress has different effects on energy intensities in different industrial sub-sectors, but generally speaking, technical progress does not promote the reduction of energy intensity.

Production Functions with Variable Elasticity of Factor Substitution: Some Analysis and Testing

1968 ◽  
Vol 50 (4) ◽  
pp. 453 ◽  
Author(s):  
Ryuzo Sato ◽  
Ronald F. Hoffman
Keyword(s):  
Production Functions ◽  
Factor Substitution ◽  
Elasticity Of Factor Substitution

scholarly journals Comparaison internationale de l’utilisation de la main-d’oeuvre dans l’industrie : un programme linéaire

2009 ◽  
Vol 50 (1) ◽  
pp. 47-62
Author(s):  
Ruth Rose Parker
Keyword(s):  
Production Function ◽  
Programming Model ◽  
Physical Capital ◽  
Educational Planning ◽  
Constant Factor ◽  
Industrial Sectors ◽  
Cost Of Education ◽  
Factor Substitution ◽  
Dynamic Version ◽  
The Cost

Abstract This linear programming model for educational planning, by allowing for choice among techniques of production, permits the introduction of non-constant factor substitution into the production function. The model is applied to educational planning in France and treats simultaneously four kinds of educated manpower and capital in the seven major industrial sectors of an economy. Alternative techniques are drawn from seven other countries for which reasonably comparable data are available. These techniques of production define the production function and determine the demand for educated manpower and capital independently of the supply of these factors. An initial static model maximizes GNP (holding its composition constant) subject to a fixed supply of manpower and capital. The model thus tests whether supply is the constraining factor in the choice of technique in theshort run. In the case tested, it is. In the dynamic version of the model, supply is allowed to increase by means of education (for manpower) and investment (for physical capital). Consumable GNP, that is GNP net of the cost of education and investment, is maximized. Terminal capital stock problems make it impossible to test the model directly. The problem is then broken down into two steps: the identification of the techniques (one for each industry) which permit the greatest net contribution to GNP, and the movement in time towards these "optimal" techniques. The first of these steps is solved using a dual version of the model, but the second is not attempted in this paper.

Elasticity of Factor Substitution in Police Agencies: Evidence from Florida

1987 ◽  
Vol 5 (2) ◽  
pp. 257 ◽  
Author(s):  
Kwabena Gyimah-Brempong
Keyword(s):  
Police Agencies ◽  
Factor Substitution ◽  
Elasticity Of Factor Substitution
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