Abstract
In this chapter the first group of econometric models the Cobb-Douglas production function and the Translog production function are estimated. The findings from estimating the Cobb-Douglas production function model reveal that (i) In general the South Korean industries are exhibiting increasing returns to scale , (ii) There is a slight substitution pattern between energy and ICT capital, and (iii) There is a significant and positive impact of energy use on the production level in the South Korean industries.
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Notes
- 1.
All values are measured in millions of Korean Won.
- 2.
The antilog is calculated because the estimated function was based on logarithm values.
- 3.
The values are as follows: (|r| > 0.258 for 99 % level, (|r| > 0.196 for 95 % level, and |r| > 0.1645 for 90 % level).
- 4.
The curvature property cannot be fully satisfied in each point of the data, as stated by Sauer et al. (2006): “With respect to the Translog production function curvature depends on the input bundles…. For some bundles quasi-concavity may be satisfied, but not for others. Hence, what can be expected is that the condition of negative-semidefiniteness of the bordered Hessian is met only locally or with respect to a range of bundles”.
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Appendix A: Elasticities Estimates for the Translog Production Function
Appendix A: Elasticities Estimates for the Translog Production Function
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Khayyat, N.T. (2015). Production Function Models Estimation. In: Energy Demand in Industry. Green Energy and Technology. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-9953-9_7
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