Abstract
We will now discuss the stochastic specification of our models. Which components of the production function are endogenous, and which exogenous, depends on the technological characteristic and institutional environment of the firm, as well as on the length of the time interval over which the flows of inputs and outputs are measured. Those inputs and outputs which can be adjusted in response to the (exogeneously determined) price variations during the time unit of observation are classified as endogeneous. The inputs and outputs which cannot be adjusted to optimal levels during the time unit of observation are taken to be exogenous. At this point, no dynamic theory is proposed for inputs and outputs considered to be at least partially adjustable, but we should realize the need for such a dynamic theory.
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© 1976 Springer-Verlag Berlin · Heidelberg
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Hasenkamp, G. (1976). Stochastic Specification. In: Specification and Estimation of Multiple-Output Production Functions. Lecture Notes in Economics and Mathematical Systems, vol 120. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-45481-3_4
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DOI: https://doi.org/10.1007/978-3-642-45481-3_4
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-07625-4
Online ISBN: 978-3-642-45481-3
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