Interfuel and energy-capital complementarity in manufacturing industries
The growing importance of energy in the production process due to factors such as fears of the depletion of cheap oil, drastic fluctuations in unit energy prices, and various exogeneous reasons, has led to many studies introducing aggregate energy as an amorphous entity-factor of production. Presently, (a) the relationship between four fossil fuels (coal, oil, gas, and electricity), and (b) the relationship between aggregate energy and aggregate capital, both in manufacturing industries, are being studied. Of prime interest in the relevant literature is the dichotomy characterizing the energy-capital complementarily/substitutability. In a thorough review of the literature of mostly translogarithmic studies we detect interfuel substitutability in the majority of the industrial sectors. More specifically, oil appears to be a substitute for both coal and electricity; gas is leaning towards substitutability with coal and electricity; oil and gas are substitutes in selected industries only, but are complements in most manufacturing processes; and finally, coal and electricity perform as substitutes in aggregate manufacturing. The [`]obscure' contradiction in the energy-capital relationship is marked. Time-series studies favor complementarity but cross-section research supports the substitutability between the two inputs of production. Despite various reconiliation attempts, the dichotomy in the results remains strong. Some explanations are, the insufficient econometric techniques which yield biased estimates, the omission of other significant factors in the estimation process, time-lags, differences in the measurement of capital, and data heterogeneity.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 35 (1990)
Issue (Month): 2 ()
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/bibliographic|
When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:35:y:1990:i:2:p:83-107. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.