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Factor substitution and complementarity in the Asia airport industry

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  • Low, Joyce M.W.
  • Tang, Loon Ching

Abstract

This paper measures and analyzes how the substitutability between various factors in Asia airports has changed over the years. Production factors are decomposed into capital and labor to examine the role of outsourcing in the recent years. The results reveal that outsourcing has emerged from being a substitute for labor and a complementary factor to capital in the late 1990s to become a substitute for both labor and capital. Increases in price elasticities and substitutability of labor and capital indicate that airports in Asia have become more adept at reacting to price changes.

Suggested Citation

  • Low, Joyce M.W. & Tang, Loon Ching, 2006. "Factor substitution and complementarity in the Asia airport industry," Journal of Air Transport Management, Elsevier, vol. 12(5), pages 261-266.
    • Handle: RePEc:eee:jaitra:v:12:y:2006:i:5:p:261-266
    DOI: 10.1016/j.jairtraman.2006.07.003
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    References listed on IDEAS

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    Cited by:

    1. Yuan, Xue-Ming & Low, Joyce M.W. & Ching Tang, Loon, 2010. "Roles of the airport and logistics services on the economic outcomes of an air cargo supply chain," International Journal of Production Economics, Elsevier, vol. 127(2), pages 215-225, October.
    2. Tovar, Beatriz & Martín-Cejas, Roberto Rendeiro, 2009. "Are outsourcing and non-aeronautical revenues important drivers in the efficiency of Spanish airports?," Journal of Air Transport Management, Elsevier, vol. 15(5), pages 217-220.
    3. Tolga Ülkü & Vahidin Jeleskovic & Jürgen Müller, 2014. "How scale and institutional setting explain the costs of small airports? -An application of spatial regression analysis," MAGKS Papers on Economics 201435, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    4. Martín, Juan Carlos & Voltes-Dorta, Augusto, 2011. "The econometric estimation of airports' cost function," Transportation Research Part B: Methodological, Elsevier, vol. 45(1), pages 112-127, January.

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