Abstract
This paper analyses the structure of costs in the Indian iron and steel industry. Using aggregate data for the period 1960-1961 to 1982-1983 we discover that the factor combinations have been cost minimizing. Estimation of a generalized cost function reveals that (1) production is characterized by increasing returns to scale; (2) technical progress has, over time, increased the use of some factors and reduced that of others, all else remaining the same; and (3) there exist considerable opportunity for substitution between factors. Several policy conclusions emerge: in particular, the inappropriateness of visualizing a fixed relation between additions to capacity and additional output.
Original language | English |
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Pages (from-to) | 22-30 |
Journal | Resources Policy |
Volume | 17 |
Issue number | 1 |
DOIs | |
Publication status | Published - 1991 |