R. Jha et al., AN ANALYSIS OF TECHNOLOGICAL-CHANGE, FACTOR SUBSTITUTION AND ECONOMIES OF SCALE IN MANUFACTURING-INDUSTRIES IN INDIA, Applied economics, 25(10), 1993, pp. 1337-1343
The biases of technological change, factor substitution and economies
of scale in four major manufacturing industries (viz. cement, electric
ity and gas, cotton textiles and iron and steel) in India are examined
. The translog cost functions are estimated using annual time series d
ata covering the period 1960-61 to 1982-83. The study reveals that tec
hnical change has been biased towards the use of labour and materials
and against the use of capital and energy in electricity and gas indus
tries. In cotton textiles, the technological change has shown the oppo
site biases. Significant economies of scale exist in the production of
electricity and gas. Enough evidence of substitution possibilities am
ong factors of production in all the four industries was also found.