A cross-country non parametric estimation of the returns to factors of production and the elasticity of scale

This paper employs local regression to estimate the output elasticity with respect to labor, human capital, physical capital and the elasticity of scale for 90 countries in 1985 and 1995. The results support the hypotheses of constant returns to scale to factors and decreasing returns to accumulable factors. The low capital-labor ratio countries have important differences in factor elasticities in relation to other countries. The augmentation of the production function by human capital did not reduce the elasticity of physical capital as suggested by Mankiw, Romer and Weil (1992). Moreover, it is investigated if the factors shares are really equal to their output elasticity. The wage share raises with the capital labor ratio and the sum of the output elasticity of labor and human capital is below the wage share for high capital labor ratio countries, happening the inverse for low capital labor ratio countries. It indicates the presence of externalities, or imperfect competition or that the marginal theory of distribution is inaccurate.

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Main Author: Marquetti,Adalmir
Format: Digital revista
Language:English
Published: Nova Economia 2007
Online Access:http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0103-63512007000100004
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spelling oai:scielo:S0103-635120070001000042007-10-29A cross-country non parametric estimation of the returns to factors of production and the elasticity of scaleMarquetti,Adalmir elasticity of output elasticity of scale wage share This paper employs local regression to estimate the output elasticity with respect to labor, human capital, physical capital and the elasticity of scale for 90 countries in 1985 and 1995. The results support the hypotheses of constant returns to scale to factors and decreasing returns to accumulable factors. The low capital-labor ratio countries have important differences in factor elasticities in relation to other countries. The augmentation of the production function by human capital did not reduce the elasticity of physical capital as suggested by Mankiw, Romer and Weil (1992). Moreover, it is investigated if the factors shares are really equal to their output elasticity. The wage share raises with the capital labor ratio and the sum of the output elasticity of labor and human capital is below the wage share for high capital labor ratio countries, happening the inverse for low capital labor ratio countries. It indicates the presence of externalities, or imperfect competition or that the marginal theory of distribution is inaccurate.info:eu-repo/semantics/openAccessNova EconomiaNova Economia v.17 n.1 20072007-04-01info:eu-repo/semantics/articletext/htmlhttp://old.scielo.br/scielo.php?script=sci_arttext&pid=S0103-63512007000100004en10.1590/S0103-63512007000100004
institution SCIELO
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country Brasil
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libraryname SciELO
language English
format Digital
author Marquetti,Adalmir
spellingShingle Marquetti,Adalmir
A cross-country non parametric estimation of the returns to factors of production and the elasticity of scale
author_facet Marquetti,Adalmir
author_sort Marquetti,Adalmir
title A cross-country non parametric estimation of the returns to factors of production and the elasticity of scale
title_short A cross-country non parametric estimation of the returns to factors of production and the elasticity of scale
title_full A cross-country non parametric estimation of the returns to factors of production and the elasticity of scale
title_fullStr A cross-country non parametric estimation of the returns to factors of production and the elasticity of scale
title_full_unstemmed A cross-country non parametric estimation of the returns to factors of production and the elasticity of scale
title_sort cross-country non parametric estimation of the returns to factors of production and the elasticity of scale
description This paper employs local regression to estimate the output elasticity with respect to labor, human capital, physical capital and the elasticity of scale for 90 countries in 1985 and 1995. The results support the hypotheses of constant returns to scale to factors and decreasing returns to accumulable factors. The low capital-labor ratio countries have important differences in factor elasticities in relation to other countries. The augmentation of the production function by human capital did not reduce the elasticity of physical capital as suggested by Mankiw, Romer and Weil (1992). Moreover, it is investigated if the factors shares are really equal to their output elasticity. The wage share raises with the capital labor ratio and the sum of the output elasticity of labor and human capital is below the wage share for high capital labor ratio countries, happening the inverse for low capital labor ratio countries. It indicates the presence of externalities, or imperfect competition or that the marginal theory of distribution is inaccurate.
publisher Nova Economia
publishDate 2007
url http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0103-63512007000100004
work_keys_str_mv AT marquettiadalmir acrosscountrynonparametricestimationofthereturnstofactorsofproductionandtheelasticityofscale
AT marquettiadalmir crosscountrynonparametricestimationofthereturnstofactorsofproductionandtheelasticityofscale
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