This paper investigates the impact of increases in oil consumption and changes in wage rates on the interfactor/interfuel substitution in Korea. A two-stage translog cost function is estimated to incorporate the feedback effect between the interfactor and interfuel substitution. Empirical results show that the substitutability/complementarity relationships among factors and fuels exhibit substantially different patterns before and after 1989.
- Developing country
- Economic growth
- Interfactor/interfuel substitutability
ASJC Scopus subject areas
- Economics and Econometrics