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

Authors

  • Adalmir Marquetti

Keywords:

elasticity of output,

Abstract

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 thefactors 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.

Downloads

Published

2009-06-05

How to Cite

MARQUETTI, A. A cross-country non parametric estimation of the returns to factors of production and the elasticity of scale. Nova Economia, [S. l.], v. 17, n. 1, 2009. Disponível em: https://revistas.face.ufmg.br/index.php/novaeconomia/article/view/483. Acesso em: 30 jun. 2024.

Issue

Vol. 17 No. 1 (2007)

Section

Regular Issue

License

Authors who publish with this journal agree to the following terms:

  1. Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution 4.0 International License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
  2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
  3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).