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Substitution Elasticities in the Large- Scale Manufacturing Industries of Pakistan

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  • A. R. KEMAL

    (Pakistan Institute of Development Economics.)

Abstract

This paper examines substitution elasticities between capital and labour in the manufacturing sector of Pakistan. It is found that whereas the substitution possibilities between the capital intensive and labour intensive techniques of production are rather limited, the substitution possibilities between various activities do exist. It is also found that changes in capital-labour ratio have a significant influence on the substitution elasticity and as such CES estimates, in general, are biased.

Suggested Citation

  • A. R. Kemal, 1981. "Substitution Elasticities in the Large- Scale Manufacturing Industries of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 20(1), pages 1-36.
    • Handle: RePEc:pid:journl:v:20:y:1981:i:1:p:1-36
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    File URL: http://www.pide.org.pk/pdf/PDR/1981/Volume1/1-36.pdf
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    References listed on IDEAS

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    1. A. R. Kemal, 1976. "Sectoral Growth Rates and Efficiency of Factor Use in Large-Scale Manufacturing Sector in West Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 15(4), pages 349-381.
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    Cited by:

    1. Muhammad Ali Chaudhary & Eatzaz Ahmad & Abid A. Burki & Mushtaq A. Khan, 1999. "Industrial Sector Input Demand Responsiveness and Policy Interventions," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 38(4), pages 1083-1100.
    2. Eatzaz Ahmad & Muhammad Idrees, 1999. "The Time Profile of the Cost Structure in Pakistan’s Manufacturing Sector," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 38(4), pages 1101-1116.
    3. Rizwana Siddiqui & A. R. Kemal, 2006. "Remittances, Trade Liberalisation, and Poverty in Pakistan: The Role of Excluded Variables in Poverty Change Analysis," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(3), pages 383-415.
    4. Siddiqui, Rizwana & Kemal, A R, 2006. "Poverty-reducing or Poverty-inducing? A CGE-based Analysis of Foreign Capital Inflows in Pakistan," MPRA Paper 2283, University Library of Munich, Germany.
    5. Shahid N. Zahid & Muhammad Akbar & Shabbar A. Jaffry, 1992. "Technical Change, Efficiency, and Capital-labour Substitution in Pakistan's Large-scale Manufacturing Sector," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 31(2), pages 165-188.
    6. Sajid Hussain & Uzma Nisar & Waseem Akram, 2020. "An Analysis of the Cost Structure of Food Industries in Pakistan: An Application of the Translog Cost Function," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 25(2), pages 1-22, July-Dec.
    7. Ashfaque H. Khan & Mohammad Rafiq, 1993. "Substitution among Labour, Capital, Imported Raw Materials, and Bank Credit in Pakistan's Manufacturing," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(4), pages 1259-1266.
    8. Bellocchi, Alessandro & Travaglini, Giuseppe, 2023. "Can variable elasticity of substitution explain changes in labor shares?," Journal of Macroeconomics, Elsevier, vol. 76(C).
    9. Karamat Ali & Abdul Hamid, 1996. "Technical Change, Technical Efficiency, and Their Impact on Input Demand in the Agricultural and Manufacturing Sectors of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 35(3), pages 215-228.
    10. Naqvi, Farzana, 1998. "A computable general equilibrium model of energy, economy and equity interactions in Pakistan," Energy Economics, Elsevier, vol. 20(4), pages 347-373, September.
    11. Sohail Zafar & Eatzaz Ahmed, 2005. "Evidence on Allocative Efficiency and Elasticities of Substitution in the Manufacturing Sector of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 44(4), pages 795-803.
    12. Rizwana Siddiqui & Abdul Razzaq Kemal & Rehana Siddiqui & Ali Kemal, 2008. "Tariff Reduction, Fiscal Adjustment and Poverty in Pakistan: a CGE-Based Analysis," Working Papers MPIA 2008-17, PEP-MPIA.

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