TY - JOUR
T1 - A cross-country estimation of the elasticity of substitution between labor and capital in manufacturing industries
AU - Claro, Sebastián
PY - 2003
Y1 - 2003
N2 - 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 she elasticity of substitution is close to one. However, the null hypothesis of Cobb-Douglas production functions is in general rejected.
AB - 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 she elasticity of substitution is close to one. However, the null hypothesis of Cobb-Douglas production functions is in general rejected.
KW - Elasticity of Substitution
KW - International Technology Differences
KW - Elasticity of Substitution
KW - International Technology Differences
UR - http://www.scopus.com/inward/record.url?scp=33744512335&partnerID=8YFLogxK
U2 - 10.4067/S0717-68212003012000003
DO - 10.4067/S0717-68212003012000003
M3 - Article
AN - SCOPUS:33744512335
SN - 0716-0046
VL - 40
SP - 239
EP - 257
JO - Cuadernos de Economia - Latin American Journal of Economics
JF - Cuadernos de Economia - Latin American Journal of Economics
IS - 120
ER -