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A Translog Cost Estimation of Capital-labour Substitubility in Malaysian Manufacturing Sector

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  • Abdullah, Maisom

    (Fakulti Ekonomi Universiti .Kebangsaan Malaysia 43600 UKM Bangi Selangor D.E, Malaysia)

  • Osman-Rani, H.

    (Fakulti Ekonomi Universiti .Kebangsaan Malaysia 43600 UKM Bangi Selangor D.E, Malaysia)

Abstract

The principal aim of this study is to provide further empirical evidence of the elasticity of substitution between capital and labour in 5-digit Malaysian manufacturing industries using the translog cost function. The Allen partial elasticity of substitution was calculated at the mean cost shares at the beginning year (1968), base year (1980) and at ending year of analysis (1984). The elasticities evaluated at the mean cost shares in different years show insignificant variations and generally lower than unity. Policy implications were then drawn from the empirical findings

Suggested Citation

  • Abdullah, Maisom & Osman-Rani, H., 1989. "A Translog Cost Estimation of Capital-labour Substitubility in Malaysian Manufacturing Sector," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 20(December), pages 43-60.
    • Handle: RePEc:ukm:jlekon:v:20:y:1989:i:december:p:43-60
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    References listed on IDEAS

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