IDEAS home Printed from https://ideas.repec.org/a/pid/journl/v28y1989i1p1-12.html
   My bibliography  Save this article

The Two-level CES Production Function for the Manufacturing Sector of Pakistan

Author

Listed:
  • Ashfaque H. Khan

    (Pakistan Institute of Development Economics, Islamabad.)

Abstract

Production functions have been widely studied in the relevant literature. In this paper, apart from labour and capital, we have used energy as a factor input and calculated the elasticity of substitution between these inputs, measured technical progress, and determined the returns to scale in the manufacturing sector of Pakistan. Since we have more than two factors of production, the standard Cobb-Douglas and CES production functions do not provide satisfactory results. Hence, two-level (nested) CES production function becomes the natural choice for the appropriate technology. Using this technology, we have found low elasticity of substitution between the three factors of production. Furthermore, the manufacturing sector is found to exhibit decreasing returns to scale, having experienced disembodied technical progress at the rate of 3.7 percent per annum.

Suggested Citation

  • Ashfaque H. Khan, 1989. "The Two-level CES Production Function for the Manufacturing Sector of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 28(1), pages 1-12.
    • Handle: RePEc:pid:journl:v:28:y:1989:i:1:p:1-12
    as

    Download full text from publisher

    File URL: http://www.pide.org.pk/pdf/PDR/1989/Volume1/1-12.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Eatzaz Ahmad & Muhammad Idrees, 1999. "The Time Profile of the Cost Structure in Pakistan’s Manufacturing Sector," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 38(4), pages 1101-1116.
    2. Naqvi, Farzana, 1998. "A computable general equilibrium model of energy, economy and equity interactions in Pakistan," Energy Economics, Elsevier, vol. 20(4), pages 347-373, September.
    3. Shahid N. Zahid & Muhammad Akbar & Shabbar A. Jaffry, 1992. "Technical Change, Efficiency, and Capital-labour Substitution in Pakistan's Large-scale Manufacturing Sector," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 31(2), pages 165-188.
    4. Khalid, Waqar & Özdeşer, Hüseyin & Jalil, Abdul, 2021. "An empirical analysis of inter-factor and inter-fuel substitution in the energy sector of Pakistan," Renewable Energy, Elsevier, vol. 177(C), pages 953-966.
    5. Burney, Nadeem A. & Al-Matrouk, Faisal T., 1996. "Energy conservation in electricity generation: A case study of the electricity and water industry in Kuwait," Energy Economics, Elsevier, vol. 18(1-2), pages 69-79, April.
    6. Ashfaque H. Khan & Mohammad Rafiq, 1993. "Substitution among Labour, Capital, Imported Raw Materials, and Bank Credit in Pakistan's Manufacturing," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(4), pages 1259-1266.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pid:journl:v:28:y:1989:i:1:p:1-12. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Khurram Iqbal (email available below). General contact details of provider: https://edirc.repec.org/data/pideipk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.