A CROSS-COUNTRY ESTIMATION OF THE ELASTICITY OF SUBSTITUTION BETWEEN LABOR AND CAPITAL IN MANUFACTURING INDUSTRIES

A CROSS-COUNTRY ESTIMATION OF THE ELASTICITY OF SUBSTITUTION BETWEEN LABOR AND CAPITAL IN MANUFACTURING INDUSTRIES

This paper presents a simple methodology to estimate the elasticity of substitution between labor and capital for firms operating in perfectly competitive factor markets with constant-elasticity-of-substitution technologies. It is applied to a cross-country sample of 28 3-digit ISIC manufacturing industries. The econometric procedure relies on measures of sectorial capital stock, that are estimated for 34 countries in 1990. Unlike previous studies, the estimates are compatible with international technology differences. The results reveal that in most industries the elasticity of substitution is close to one. However, the null hypothesis of Cobb-Douglas production functions is in general rejected

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Main Author: CLARO,SEBASTIÁN
Format: Digital revista
Language:English
Published: Instituto de Economía, Pontificia Universidad Católica de Chile 2003
Online Access:http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0717-68212003012000003
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spelling oai:scielo:S0717-682120030120000032003-10-07A CROSS-COUNTRY ESTIMATION OF THE ELASTICITY OF SUBSTITUTION BETWEEN LABOR AND CAPITAL IN MANUFACTURING INDUSTRIESCLARO,SEBASTIÁN Elasticity of Substitution International Technology Differences This paper presents a simple methodology to estimate the elasticity of substitution between labor and capital for firms operating in perfectly competitive factor markets with constant-elasticity-of-substitution technologies. It is applied to a cross-country sample of 28 3-digit ISIC manufacturing industries. The econometric procedure relies on measures of sectorial capital stock, that are estimated for 34 countries in 1990. Unlike previous studies, the estimates are compatible with international technology differences. The results reveal that in most industries the elasticity of substitution is close to one. However, the null hypothesis of Cobb-Douglas production functions is in general rejectedinfo:eu-repo/semantics/openAccessInstituto de Economía, Pontificia Universidad Católica de ChileCuadernos de economía v.40 n.120 20032003-08-01text/htmlhttp://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0717-68212003012000003en10.4067/S0717-68212003012000003
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country Chile
countrycode CL
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databasecode rev-scielo-cl
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region America del Sur
libraryname SciELO
language English
format Digital
author CLARO,SEBASTIÁN
spellingShingle CLARO,SEBASTIÁN
A CROSS-COUNTRY ESTIMATION OF THE ELASTICITY OF SUBSTITUTION BETWEEN LABOR AND CAPITAL IN MANUFACTURING INDUSTRIES
author_facet CLARO,SEBASTIÁN
author_sort CLARO,SEBASTIÁN
title A CROSS-COUNTRY ESTIMATION OF THE ELASTICITY OF SUBSTITUTION BETWEEN LABOR AND CAPITAL IN MANUFACTURING INDUSTRIES
title_short A CROSS-COUNTRY ESTIMATION OF THE ELASTICITY OF SUBSTITUTION BETWEEN LABOR AND CAPITAL IN MANUFACTURING INDUSTRIES
title_full A CROSS-COUNTRY ESTIMATION OF THE ELASTICITY OF SUBSTITUTION BETWEEN LABOR AND CAPITAL IN MANUFACTURING INDUSTRIES
title_fullStr A CROSS-COUNTRY ESTIMATION OF THE ELASTICITY OF SUBSTITUTION BETWEEN LABOR AND CAPITAL IN MANUFACTURING INDUSTRIES
title_full_unstemmed A CROSS-COUNTRY ESTIMATION OF THE ELASTICITY OF SUBSTITUTION BETWEEN LABOR AND CAPITAL IN MANUFACTURING INDUSTRIES
title_sort cross-country estimation of the elasticity of substitution between labor and capital in manufacturing industries
description This paper presents a simple methodology to estimate the elasticity of substitution between labor and capital for firms operating in perfectly competitive factor markets with constant-elasticity-of-substitution technologies. It is applied to a cross-country sample of 28 3-digit ISIC manufacturing industries. The econometric procedure relies on measures of sectorial capital stock, that are estimated for 34 countries in 1990. Unlike previous studies, the estimates are compatible with international technology differences. The results reveal that in most industries the elasticity of substitution is close to one. However, the null hypothesis of Cobb-Douglas production functions is in general rejected
publisher Instituto de Economía, Pontificia Universidad Católica de Chile
publishDate 2003
url http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0717-68212003012000003
work_keys_str_mv AT clarosebastian acrosscountryestimationoftheelasticityofsubstitutionbetweenlaborandcapitalinmanufacturingindustries
AT clarosebastian crosscountryestimationoftheelasticityofsubstitutionbetweenlaborandcapitalinmanufacturingindustries
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