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Testing Capital-Skill Complementarity Across Sectors in a Panel of Spanish Regions

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  • Fidel Pérez Sebastián

    () (Universidad de Alicante)

Abstract

The aim of this paper is to examine the evidence for capital-skilled labor complementarity in six different activity sectors using aggregate production function specifications and a time-series, cross-section panel of Spanish regions. Estimation results have troubles finding evidence that supports departing from the Cobb-Douglas assumption and, if anything, find capital skill substitutablity in most sectors. They also suggest that capital skill complementarity might be a sector-specific phenomenon. El objetivo de este artículo es examinar la evidencia sobre la hipótesis capital-habilidad en seis diferentes sectores de actividades usando funciones de producción agregada en un panel de regiones españolas. Los resultados de la estimación tienen problemas para encontrar evidencia que apoye el separarse del supuesto Cobb-Douglas y, si acaso, encuentran substituibilidad entre el capital y la mano de obra cualificada en la mayoría de los sectores. También sugieren que la complementariedad capital-habilidad puede ser un fenómeno específico a ciertos sectores.

Suggested Citation

  • Fidel Pérez Sebastián, 2008. "Testing Capital-Skill Complementarity Across Sectors in a Panel of Spanish Regions," Working Papers. Serie EC 2008-11, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  • Handle: RePEc:ivi:wpasec:2008-11
    as

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    File URL: http://www.ivie.es/downloads/docs/wpasec/wpasec-2008-11.pdf
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    References listed on IDEAS

    as
    1. Per Krusell & Lee E. Ohanian & JosÈ-Victor RÌos-Rull & Giovanni L. Violante, 2000. "Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis," Econometrica, Econometric Society, vol. 68(5), pages 1029-1054, September.
    2. Karnit Flug & Zvi Hercowitz, 2000. "Equipment Investment and the Relative Demand for Skilled Labor: International Evidence," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(3), pages 461-485, July.
    3. repec:lsu:lsuwpp:2003-12 is not listed on IDEAS
    4. Fallon, P R & Layard, P R G, 1975. "Capital-Skill Complementarity, Income Distribution, and Output Accounting," Journal of Political Economy, University of Chicago Press, vol. 83(2), pages 279-301, April.
    5. Bergstrom, Villy & Panas, Epaminondas E, 1992. "How Robust Is the Capital-Skill Complementarity Hypothesis?," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 540-546, August.
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    More about this item

    Keywords

    Complementariedad de los inputs; funciones de producción agregada; datos de panel. Input complementarity; aggregate production function; panel data.;

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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