Abstract

CASAS HERRERA, Julián Augusto  and  GUTIERREZ AYALA, Jhancarlos. Territorial Analysis of the Elasticities of Substitution of Production Factors in the Colombian Manufacturing Industry (1992-2018). Lect. Econ. [online]. 2021, n.94, pp.233-265.  Epub Apr 16, 2021. ISSN 0120-2596.  https://doi.org/10.17533/udea.le.n94a343836.

The article presents the estimation of the price and substitution elasticities of demand between inputs, labor, intermediate material, capital, energy, and other production expenses for the industrial manufacturing sector of Colombia (the central region and the department of Boyacá). The estimates were made through the application of translogarithmic cost functions with data for the period 1992 - 2018 from the Annual Manufacturing Survey. Results show a low substitution level between capital and labor in the national scenario, with an elasticity of 0.08%. In the case of the department of Boyacá, the relationship was complementary; increases of 1% in the price of capital are related to an average reduction of 0.17% in the demand for labor. These results show differences in the average relative participation of the production factors in the total cost, which allows for the conclusion that the dynamics of the national, regional, and department industrial sectors are heterogeneous.

Clasificación JEL: C51, D01, D24

Keywords : manufacturing industry; production factors; elasticities; translogarithmic function; SURE.

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