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Is the Efficiency Wage Hypothesis Valid for Developing Countries? Evidence from the Turkish Cement Industry

  • Seref Saygili

The efficiency wage hypothesis is tested by using one of the recently developed methods to measure technical efficiency. We use panel data on 40 Turkish cement plants for the period 1980-1995. The predictions of the efficiency wage hypothesis are tested in two ways: estimation of wage augmented production frontiers and the simultaneous estimation of a production function together with inefficiency effects. Our empirical analysis shows that the wage level is one of the significant factors contributing to the output and technical efficiency of plants in the cement industry in Turkey.

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File URL: ftp://ftp.ukc.ac.uk/pub/ejr/RePEc/ukc/ukcedp/9810.pdf
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Paper provided by School of Economics, University of Kent in its series Studies in Economics with number 9810.

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Date of creation: Apr 1998
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Handle: RePEc:ukc:ukcedp:9810
Contact details of provider: Postal: School of Economics, University of Kent, Canterbury, Kent, CT2 7NP
Phone: +44 (0)1227 827497
Web page: http://www.kent.ac.uk/economics/

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  19. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-93, March.
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