An Analysis of Technological Change, Factor Substitution and Economies of Scale in Indian Manufacturing Industries

Raghbendra Jha, M. Narasimha Murty, Satya Paul, B. Bhaskara Rao

    Research output: Contribution to journalArticle

    Abstract

    The biases of technological change, factor substitution and economies of scale in four major manufacturing industries (viz. cement, electricity and gas, cotton textiles and iron and steel) in India are examined. The translog cost functions are estimated using annual time series data covering the period 1960-61 to 1982-83. The study reveals that technical change has been biased towards the use of labour and materials and against the use of capital and energy in electricity and gas industries. In cotton textiles, the technological change has shown the opposite biases. Significant economies of scale exist in the production of electricity and gas. Enough evidence of substitution possibilities among factors of production in all the four industries was also found.
    Original languageEnglish
    Pages (from-to)1337-1343
    JournalApplied Economics
    Volume25
    Publication statusPublished - 1993

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