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Estimation Of A Production Function Of Brazil With Domestic And Foreign Capital Stock, 1991-2017

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  • Thomas H.W. ZIESEMER

Abstract

We estimate a Cobb-Douglas production function distinguishing between a domestic and a foreign capital stock built from data of imported machinery and transport equipment for Brazil. Some autoregressive models (AR(I)MAX) in log levels are estimated by the nonlinear General Method of Moments. The elasticity of production of foreign capital is about 40% of that of domestic capital; the function has about constant returns to scale in capital and labour variables, and human capital and technical change are also highly productive. Estimations based on preferred ARDL models and FMOLS yield higher elasticities of production for foreign capital goods. Having more observations in the future will allow better exploitation of the automatic lag length choice.

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  • Thomas H.W. ZIESEMER, 2024. "Estimation Of A Production Function Of Brazil With Domestic And Foreign Capital Stock, 1991-2017," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 24(2), pages 103-128.
    • Handle: RePEc:eaa:aeinde:v:24:y:2024:i:2_7
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    References listed on IDEAS

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    1. Jesus Felipe & John McCombie & Aashish Mehta & Donna Faye Bajaro, 2021. "Production Function Estimation: Biased Coefficients and Endogenous Regressors, or a Case of Collective Amnesia?," Economics Working Paper Archive wp_994, Levy Economics Institute.
    2. Barry P. Bosworth & Susan M. Collins, 2003. "The Empirics of Growth: An Update," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(2), pages 113-206.
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    Keywords

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    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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