TY - JOUR
T1 - Dynamic factor demand models, productivity measurement, and rates of return
T2 - Theory and an empirical application to the US Bell System
AU - Nadiri, M. Ishaq
AU - Prucha, Ingmar R.
N1 - Funding Information:
3 An earlier version of this paper (Nadiri and Prucha, 1983) was first presented at the Workshop on Investment and Productivity of the Summer Institute of the National Bureau of Economic Research, Cambridge, July 1983. A first revision was circulated as Nadiri and Prucha (1984). (This revision was submitted as a contribution to a book that remained in the stage of preparation.) The present revision connects the material with recent developments in the theory of dynamic factor demand and productivity measurement. We would like to thank Pierre Mohnen for his assistance. We also gratefully acknowledge the financial support of the National Science Foundation, Grant PRA-8108635, the C. V. Starr Center for Applied Economics, and the Research Board of the Graduate School of the University of Maryland. Furthermore, we thank the computer centres of New York University and the University of Maryland for their support with computer time.
PY - 1990/12
Y1 - 1990/12
N2 - Prucha and Nadiri (1982, 1986, 1988) introduced a methodology to estimate systems of dynamic factor demand that allows for considerable flexibility in both the choice of the functional form of the technology and the expectation formation process. This paper applies this methodology to estimate the production structure and the demand for labour, materials, capital and R and D by the US Bell System. The paper provides estimates for short-, intermediate-, and long-run price and output elasticities of the inputs, as well as estimates on the rate of return on capital and R and D. The paper also discusses the issue of the measurement of technical change if the firm is in temporary rather than long-run equilibrium and the technology is not assumed to be linear homogeneous. The paper provides estimates for input and output based technical change as well as for returns to scale. Furthermore, the paper gives a decomposition of the traditional measure of total factor productivity growth.
AB - Prucha and Nadiri (1982, 1986, 1988) introduced a methodology to estimate systems of dynamic factor demand that allows for considerable flexibility in both the choice of the functional form of the technology and the expectation formation process. This paper applies this methodology to estimate the production structure and the demand for labour, materials, capital and R and D by the US Bell System. The paper provides estimates for short-, intermediate-, and long-run price and output elasticities of the inputs, as well as estimates on the rate of return on capital and R and D. The paper also discusses the issue of the measurement of technical change if the firm is in temporary rather than long-run equilibrium and the technology is not assumed to be linear homogeneous. The paper provides estimates for input and output based technical change as well as for returns to scale. Furthermore, the paper gives a decomposition of the traditional measure of total factor productivity growth.
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U2 - 10.1016/0954-349X(90)90005-S
DO - 10.1016/0954-349X(90)90005-S
M3 - Article
AN - SCOPUS:38249017012
SN - 0954-349X
VL - 1
SP - 263
EP - 289
JO - Structural Change and Economic Dynamics
JF - Structural Change and Economic Dynamics
IS - 2
ER -