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Capital, labor, and derived demand for information: Evidence from China

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  • Xiaofeng Li
  • Tingjie Lu

Abstract

In this paper, information capital is considered as a separate input of production along with noninformation capital and labor. The substitution possibility among information capital, noninformation capital and labor has been estimated by nonlinear iterative algorithm using Chinese data for 1995–2017. The empirical results from the study imply that estimates of Chinese input substitution degree and productivity are underestimated without including information capital as an input separate from noninformation capital. When information capital and labor are combined, the contribution ratio of labor force may increase. Information capital interacts with noninformation capital and labor to promote economic development and production efficiency.

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  • Xiaofeng Li & Tingjie Lu, 2020. "Capital, labor, and derived demand for information: Evidence from China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(3), pages 339-353, April.
    • Handle: RePEc:wly:mgtdec:v:41:y:2020:i:3:p:339-353
    DOI: 10.1002/mde.3103
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