Production functions with factor-oriented scale sensitivity

It is not unreasonable to believe that most, if not all, important innovations are embodied in an industry's capital stock. The notion that the efficiency of large scale of production is brought about mainly by a larger size capital stock or a more advanced one is not new. The purpose of this p...

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Bibliographic Details
Published in:The review of economics and statistics 1996-05, Vol.78 (2), p.309-320
Main Authors: Vijverberg, Chu-Ping C., John C. H. Fei
Format: Article
Language:English
Subjects:
Capital stock
Capital stocks
Diminishing marginal returns
Economic theory
Economics
Economies of scale
English language learners
fonction de production
funciones de la produccion
Industrial production
Mathematical independent variables
Production capital
Production estimates
Production functions
Stock shares
Studies
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Summary:It is not unreasonable to believe that most, if not all, important innovations are embodied in an industry's capital stock. The notion that the efficiency of large scale of production is brought about mainly by a larger size capital stock or a more advanced one is not new. The purpose of this paper is to search for production functions that allow the scale elasticity to vary with respect to capital stock and, at the same time, contains desirable properties of diminishing returns to labor and/or factor substitutability. There are numerous SSWK production functions. However, the objectives of this paper are to, first of all, find a general way to generate the SSWK production functions, and secondly, to find those SSWK's with certain desirable properties.
ISSN:0034-6535
1530-9142
DOI:10.2307/2109933