How Much Does Foreign Capital Matter

In this paper, we present a function for the share of factors of output, which is in complete agreement with primary production theories in microeconomics. We follow some assumptions for production function, and also payment to each factor equals their marginal products, and we create a new production function which is called the efficient production function. We then try not only to remove the significant defects in Cobb-Douglas production function but also by accept the presented theory. We conclude that the need for most previous approaches have caused problems and even the developed functions have not been able to solve the problem. The presented model in complete agreement is also supported by the empirical findings for the United States (U.S.) economy.

This study revisited an alternative profit efficiency function specified by Berger & Mester, (1997) and we applied Battese & Coelli, (1995) inefficiency model as a unified and consistent framework in exploring the determinants of important factors causing profit efficiency differential on banking industry in Bangladesh. Using stochastic frontier technique we estimated bank specific profit efficiency for the period 2000 to 2007. This study attempted to examine the changes in the profit efficiency in accordance with NBs (Nationalized Commercial Banks), ISBs (Islamic Banks), FBs (Foreign Banks) and PBs (Private Banks) and significant variations of efficiencies across different kinds of banks in time periods. We found that the profit inefficiency has declined over the reference period and Translog Production Function is more preferable than Cobb-Douglas Production Function. Our results showed that Nationalized Commercial Banks were significantly inefficient and on the contrary ISBs, FBs, and PBs were efficient in producing profit and noteworthy. The estimated year wise average efficiencies of the sample banks from the profit efficiency model was 0.664 while group wise average profit efficiency was 0,639. Dhaka Bank is highly efficient with score 0.89 and AB Bank was found lowest efficient with score 0,35 according to the sample data.

Keynes argued that the short-term interest rate is the main driver of the long-term interest rate on government bonds. This paper empirically models the relationship between the short-term interest rate and long-term government securities yields in Canada, after controlling for other important financial variables. The statistical analysis uses high-frequency daily data from 1990 to 2018 to examine the behavioral dynamics of the long-term interest rate. The empirical results show that the actions of the Bank of Canada are key drivers of Canadian government securities yields in the long run, which supports the Keynesian perspective. There is a positive association between long-term bond yields and the Canadian federal government’s net debt to GDP ratio, but the effect is fairly modest. An important implication of these findings is that the Bank of Canada’s actions can have a decisive effect on the long-term interest rate over the long horizon. JEL codes : E43, E50, E60, G10, G12

The output elasticities of inputs seem all about what an applied researcher is concerned with. The Cobb-Douglas production functions formulae possess the convenient property that the exponents of inputs readily represent the output elasticities of inputs such that the sum of these exponents reveal whether there are increasing, constant or decreasing returns to scale. However, there are also some inconveniencies with this type of production functions. In this paper we will investigate three of them. First of all, the short run marginal cost functions obtained from the Cobb-Douglas type of production functions can be both convex and concave depending on the magnitude of the technical coefficient of labor input. Unfortunately, this awkward behavior cannot be explained with the economic theory. Secondly, when the variable input labor with a given level of Technical productivity is complemented with a once-and-for-all increase in the amount of physical capital input, the labor becomes more and more productive as the usage of labor increases. This clearly stands in contrast with the Law of Diminishing Marginal Returns. Finally, we find ever-increasing returns to ‘Technical productivity of labor’, keeping the amounts of labor and physical capital constant, which is again surprising. Key words : paradox; convex and concave marginal costs; Cobb-Douglas production function; increasing rate of return to Technical productivity of labor. JEL classification : D2, D3, D4. DOI : 10.7176/EJBM/11-1-12

The objective of the present study is to determine the status of technical efficiency for a sample of beekeepers in Malaysia. This is because determining the efficiency status of farmers are very important for policy purposes. Efficiency also is a very important factor of productivity growth. In an economy where resources are scarce and opportunities for new technologies are lacking, inefficiency studies will be able to show that it is possible to raise productivity by improving efficiency without the resource base or developing new technology. Estimates on the extent of inefficiency can help decide whether to improve efficiency or to develop new technologies to raise agricultural productivity. In this study, a Cobb-Douglas production function was employed to beekeeping data. Using the method of Maximum Likelihood Estimation (MLE) procedure, we derived the stochastic frontier production function. The technical efficiency index computed shows a mean efficiency ratio of 0.625 implying that substantial inefficiency exists among the Malaysian beekeepers in the sample under study. Our results indicate that there are great potentials for the beekeepers to further increase output using the available inputs and technology.

We present the structure and features of the International Model for Projecting Activity (IMPACT), a global semi-structural model used to conduct projections and policy analysis at the Bank of Canada. Major blocks of the model are developed based on the rational error correction framework of Kozicki and Tinsley (1999), which allows the model to strike a balance between theoretical structure and empirical performance. IMPACT divides the world economy into six regions: United States, the euro area, Japan, China, oil-importing emerging-market economies and oil-exporting rest of the world. The model features a rich set of cross-border trade and financial linkages that have been shown in the literature to be crucial to explaining global co-movements in business cycles. It is also globally consistent in the sense that both net foreign assets and net exports must be equal to zero at the global level. These cross-region linkages and the global stock-flow consistency allow IMPACT to generate a rigorous and more complete picture of the evolution of the global economy to better inform policy.

Based on the analysis of the quantitative assessment of the influence of the factors of innovative activity on the dynamics of economic development and the endogenous determination of its contribution to the economic growth of the country, it is revealed that in foreign researches it is identified with the concept of the influence of scientific and technological progress. However, the impact of innovative factors on economic growth is not considered separately. Attempts of such a definition in Ukrainian researches are limited to well-known approaches: methods of integral assessment, methods of expert assessments, the method of multipliers, econometric models. Most of the approaches considered are focused on defining the innovative impact on economic development, rather than on economic growth. The main tool for assessing the role and innovative contribution to economic growth is the aggregate supply function model, usually based on the Cobb-Douglas production function. The analysis of the approaches used revealed a number of comments on econometric approaches. In contrast to this, an approach is proposed based on the neoclassical production function of Cobb-Douglas with a constant return to scale in the form of J. Tinbergen, with technical progress neutral according to J. Hicks, decreasing marginal productivity of macrofactors with limited interchangeability, which provides a causal functional (and not a statistical) relationship between input and output variables; does not require long time series. It is characterized by dynamic coefficients of elasticity, capital utilization rate and taking into account the innovation factor in each separate period. The innovation factor includes: the gross domestic expenditures on research and development, the expenditures on innovation, general expenditures on education. To define the contribution of formal innovation factor in economic growth applied "method of Solow residual", which by taking the logarithm and obtaining logarithmic derivatives in the production function, provides a formalized information about the contribution of each factor to economic growth and allows to develop the necessary regulatory measures. The method has been tested at the level of the country and old industrial regions of Ukraine: Dnepropetrovsk, Zaporozhye and Kirovograd regions of the Dnieper economic region of Ukraine. The role, importance and influence of the main factors of economic growth along with innovative ones on the part of the aggregate supply are considered and the cost-effectiveness of innovative factors is estimated.

In the past, growth models have been constructed and analyzed with the help of a production function subject to certain restrictive features. For quite some time, the Cobb-Douglas production function (CD) with its input exponents adding upto unity and a unitary elasticity of substitution were mostly used by the economists for analysis. In recent times, the constant elasticity of substitution production function (CES) which includes CD, as well as Leontif production function as its special case has been widely used in various studies. One major limitation of this production function is that the elasticity of substitution parameter is not variable along an isoquant, though it can take different values for different values for different industries. We have made an attempt to test whether the estimated values of elasticity of substitution between labour and capital for a sector tend to change from one year to another and also whether it is CD or CES production function that characterizes a particular sector.

This paper estimates a series of production functions that explain the number of points a National Football League team will score during a season based on six measures of its offensive performance. The models that are estimated are linear and Cobb-Douglas production functions, using data for each team for each season from 2000 to 2018. Additionally, separate production functions are estimated for two sub-periods to determine whether the production functions vary over time and an accuracy check is performed at the end of the paper, where each team’s actual points are compared to its predicted points for the 2018 season.

We directly observed a Cobb–Douglas symmetric plane using the index of surface openness, which is used in geography, and successfully identified it. Based on this observation, we measured the capital shares (capital elasticity) and labor shares (labor elasticity) and compared them with the results of multiple regression analysis used in economics. We confirmed consistent agreement in seven countries: Japan, Germany, France, Spain, Italy, the United Kingdom, and the Netherlands. Thus, we show that the Cobb–Douglas production function can be clearly captured in empirical data as a geometric entity with a quasi-inverse symmetry of variables. Based on the above discussion, we theoretically clarified why the Cobb–Douglas production function is better fit to empirical data in economics, because it uniquely derives the fact that their variables follow a power-law distribution.

The Success of the Cobb-Douglas Production Function Is An Illusion

In this study, contribution of education to economic growth in Turkey, between 1980 and 1990, was analyzed via the estimations of production function relationships. Firstly, Cobb-Douglas production functions were estimated by OLS, for panel data. Secondly, a difference model considering also the province-specific differences w as estimated. Finally, more flexible functional form of translog function was considered. lt w as concluded that the effect of education on output growth was positive, but not increasing during the decade, and also unchanging across regions. The output elasticity of capital increased over time and got lower for underdeveloped regions, while the reverse was true for the output elasticity of labor. lt was observed that the assumption of constant retums to scale, which was assumed for Cobb-Douglas production function held for the Turkish economy within the decade. The claims of difference forms were not supported for Cobb-Douglas production function, while they were supported for translog form. Translog function was found to be advantageous over Cobb-Douglas production function.

The manufacturing sector has been a major driver of GDP growth in Bangladesh. The sector recorded an impressive average annual growth during last a couple of decades. This study is an attempt to test empirically the Cobb-Douglas production function for manufacturing sector of Bangladesh. Data of total value of output, total asset, total liabilities, number of permanent workers etc. of about six major types of industries including Garments, Textiles, Food & Food Processing, Leather & Leather Products, Electronics and Chemicals& Pharmaceuticals have been used. Researchers use total value of output as Y, total liabilities as K, and number of permanent workers (including officials managers, personal) as L. Study finds that coefficient for K and L are 0.49 and 0.51 respectively for entire manufacturing sector. In case of Garments, coefficient for K is 0.30 and L is 0.61 implying that labor is more productive than capital. The statement is also true for Textile sector and Leather & leather products. Capital is, on other hand, more productive than labor in Food & food processing industries, Electronics, Chemicals & Pharmaceuticals sectors. The coefficients are significant and do not suffer from MC and also not from Autocorrelation. To correct heteroscedasticity, WLS method (weighted Least Square) has been adopted. Findings reveal that Cobb-Douglas production function is applicable and exhibits increasing returns to scale in the context of manufacturing sector of Bangladesh.

ABSTRACT. This study aims to determine the efficiency of a scale and intensit y of input use in laying chicken farming production phase II at Gowa. Results of this study are expected to provide additional information for further research, and for the improvement of poultry farm business management at the sites. Using survey method with data collection observation and interview. Some 30 farmers samples have been analyzed. The data collected is last 3 months include; (1) the number of population, (2) the amount of egg production per day or Henday, (3) the number of inputs used include DOC, feed, spacious cages, labor, and living cost. To determine the efficiency of a scale and intensity of input use analysts used the Cobb-Douglas production function. Results of this study concluded that the scale of production and the intensity of input use production phase II is a set of conditions that are not efficient or deccreasing return to scale (DRS). This is because the production phase II, aged 19-25 months biological production and reproductive capacity has decreased. The implications of this research is laying chicken breeders production phase II need to input a maximum of 39.80% reduction of the number of previous use.

Poultry production is one of the most important economic activities to the smallholder farmers of Kenya. However, constraints are evident which have resulted in low production of poultry and poultry products to meet population demand and for socio-economic sustainability of the livelihoods. The objective of the study was to determine resource use efficiency, optimal production levels, production systems of small-scale poultry farmers in Bureti district, Kenya. Primary data were obtained using a set of structured questionnaires from 300 representative farmers drawn from the study area using cross-sectional sampling techniques. Data were analyzed by Cobb-Douglas production function. The results showed that the resources used in poultry production were underutilized while others were over utilized. The efficiency indicators for poultry feeds (0.0603) showed that poultry feeds were inefficiently used. Labour efficiency indicator (-0.091) showed that farmers were not only grossly inefficient in the use of the resource but also over utilized it while the efficiency indicator (60.86) for poultry equipment implied the resource was inefficiently utilized. It is recommended that farmers should use inputs more efficiently (particularly feeds which were being inefficiently utilized) by reducing their levels of employment.