Technology transfer to the USSR: The marginal-productivity differential and the elasticity of intra-capital substitution in Soviet industry

Abstract

This article critically examines the estimations of the effects of technology transfer on Soviet industry by D. W. Green, H. S. Levine, and M. L. Weitzman. A hybrid production function is estimated on the time-series data. Soviet-made capital and imported equipment are integrated into a composite capital in the CES form. This capital is then put together with labor to form a CD production function. Statistical tests show that the marginal productivities are indistinguishable between domestic and imported capital and that the elasticity of substitution between the two types of capital is close to unity. The hybrid form, however, yields estimates significantly different from those of the CD and additive forms. J. Comp. Econ., June 1979 3(2), pp. 181–194. Russian Research Center, Harvard University, Cambridge, Massachusetts, and Department of Economics, University of Florida, Gainesville, Florida.