Productivity growth in the industrial sector has come to be identified as a key factor in the structural formation of the developing countries. The paper employs the production function framework to study productivity growth and technical efficiency in thirty important industries in Bangladesh using the CMI (Census of manufacturing Industries) data for individual firms for the years 1974/75, 1975/76; 1979/80 to 1985/86. (DÜI-Sen)
This paper presents estimates of indexes of internal returns to scale and external economies for two‐digit manufacturing industries in Taiwan. Estimating the returns to scale indexes involves using both SUR and 3SLS estimation procedures. The data strongly support the presence of external increasing returns to scale. The findings indicate no evidence of internal increasing return in all two‐digit manufacturing industries. According to the endogenous growth literature, the existence of externalities in production bears important economic implications in some aspects of economic growth, even though the data cannot distinguish the transmission mechanism.
Despite the fact that there are great disparities in factor endowments, techniques employed in the manufacturing sector of underdeveloped labour surplus countries are comparable to those of highly industrialized capital -abundant countries like the United States. A.R. Khan in his paper on capital intensities and factor use [13] concluded from an international comparison of factor intensities that Pakistani capital intensities are near the American level in a number of industries while in some cases they are even higher. Explanations of this paradox are based on two different assumptions regarding the magnitude of the elasticity of substitution between capital and labour. On the one hand it is assumed that the elasticity of substitution and thereby the possibility of labour absorption via changes in factor prices are very limited due to the dominance of techniques borrowed from the West and oriented to the needs of capital rich nations. On the other hand, significant substitution possibilities are assumed in production techniques and the presence of high capital intensities in the industrial sector is attributed to distortions in the factor markets in the form of exchange rate regulations, low rates of bank borrowing, etc., which lead to the price of capital being much lower than it's social cost.
The choice of technology in the developing countries has been a subject matter of considerable theoretical and empirical investigation. That labour-abundant economy like Pakistan should opt for labour-intensive technology in order to maximise income and employment has been widely recommended. There has, however, been long-standing controversy as to whether, and how far, the choice of labour-intensive technology slows down the rate of growth of income as against the maximisation of current income by increasing the share of wages in income which are assumed to be wholly or mostly consumed and by correspondingly reducing the share of profits which are assumed to add mainly to the invisible surplus and thus to increase the rate of capital accumulation. This line of reasoning postulates that a developing economy has more or less free choice between alternative techniques, embodying different degrees of labour intensity and has, in addition, adequate instruments of policy at its disposal to regulate the choice of technology in the public and private sectors of the economy; it further seems to imply that it has very inadequate or ineffective instruments of policy at its disposal to alter the disposition of income between savings and investment, once the technology and its attendant distribution of income between wages and profits are given. The feasibility or the effectiveness of the various fiscal instruments for increasing the rate of saving in a developing economy has often been discussed, however, there is very little empirical analysis of the existing pattern of technology as well as of the limitations on the choice of technology in a country like Pakistan which imports technology mainly under foreign aid tied to the purchases in the individual aid-giving countries which happen to grant loan for individual, particular capital projects.
In: World development: the multi-disciplinary international journal devoted to the study and promotion of world development, Band 36, Heft 10, S. 1725-1744
In: American federationist: official monthly magazine of the American Federation of Labor and Congress of Industrial Organizations, Band 35, S. 695-701