Australian Manufacturing Industry Research Articles

Ces Production Function: Estimates of Elasticity of Substitution, Returns to Scale and Technical Progress in Australian Manufacturing Industries

This paper attempts to estimate (i) the elasticity of substitution between capital and labour (ii) returns to scale and (iii) Hicks-neutral disembodied technical progress in Australian twelve (two digit) manufacturing industries as well as total manufacturing during the period 1968/69 through 1977/78, The method employed to derive the above estimates was the constant elasticity of substitution (C.E.S.) production function. Time series data have been used in that connection. Subject to the limitations of the study, the relative orders of magnitude of the estimates appear to be plausible.

THE VERDOORN LAW AND THE SALTER MECHANISM: A NOTE ON AUSTRALIAN MANUFACTURING INDUSTRY*

Australian Economic PapersVolume 22, Issue 41 p. 364-373 THE VERDOORN LAW AND THE SALTER MECHANISM: A NOTE ON AUSTRALIAN MANUFACTURING INDUSTRY* J.S. METCALFE, J.S. METCALFE Universities of Manchester New EnglandSearch for more papers by this authorP.H. HALL, P.H. HALL Universities of Manchester New EnglandSearch for more papers by this author J.S. METCALFE, J.S. METCALFE Universities of Manchester New EnglandSearch for more papers by this authorP.H. HALL, P.H. HALL Universities of Manchester New EnglandSearch for more papers by this author First published: December 1983 https://doi.org/10.1111/j.1467-8454.1983.tb00430.xCitations: 9 † *We wish to thank Andrew Leung and Paul Ashurst for valuable computational assistance, the University of New England for financial support. and the Australian Bureau of Statistics, Canberra, for providing the data on which this study is based. Computation was carried out on the UMRCC CDC7600 computer using the REGRESS package by E. Horler. The comments of the referees are also gratefully acknowledged. AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat Citing Literature Volume22, Issue41December 1983Pages 364-373 RelatedInformation

Transport Cost and Tariff Protection of Australian Manufacturing*

This paper provides estimates of transport cost and tariff protection available to import‐competing Australian manufacturing industries. It finds that transport costs provide an important component of total protection available to such industries; one which, for many, is more important than the Australian tariff. In view of the effects of protection on industrial structure and performance, it should be explicitly recognized that transport costs are an unavoidable element of the protective structure and are deserving of study in their own right.

Patterns of Energy Use in Australian Manufacturing Industry

This paper develops an index of energy productivity and employs it to examine productivity movements across 62 Australian manufacturing industries for the period 1950–1968. Data were not available to permit extension of the analysis beyond 1968. In the empirical part of the paper, the first task is to identify industries which are major energy users. Secondly, the best and worst performers, relative to the average, in terms of energy productivity gain are identified. A line of enquiry into energy productivity is then pursued analogous to that developed by Salter's work on labour productivity and technical change.

The effect of domestic and foreign competition on performance in Australian manufacturing industries

This study investigated the role of both domestic structural factors and tariff protection in explaining inter-industry differences in profitability in Australian manufacturing industries. At no stage did concentration have a significant effect on profitability at the four-digit level of analysis, in comparison to its observed significant positive effect at the three-digit level. Other structural factors appear to be more important in explaining inter-industry variations in profitability in Australia. The effective tariff rate was negatively associated with profitability, the relationship notably being more highly significant in those industries enjoying higher than average tariff protection. It is suggested that this negative relationship for Australia may be due to a similar phenomenon noted in relation to Canadian manufacturing, namely that tariff protection has led to the permanent creation of too many sub-optimal production units, resulting in lower efficiency and decreased profits. A reduction in the effective rate of tariff protection given to high cost Australian manufacturing industries may therefore yield greater efficiency, as well as at the same time permitting the possibility of increased potential and actual foreign competition.

Plant size, scale economies and “optimum” concentration levels in Australian manufacturing industries

topic of great debate in the areas of antitrust economics and industrial organization has been whether the continued existence of large firms, or their creation through merger, should be permitted. The question reduces essentially to whether the possible anti-competitive effects of dominance are likely to outweigh any beneficial effects stemming from the possibly superior efficiency of the large firm. The quest for efficiency in resource allocation appears historically to have been pursued more diligently, at least in antitrust, in Australia and Britain than in the United States, where the efficiency defense to antitrust investigation of mergers is not commonly successful. Little research, however, has been done in Australia on the possible sources of such large firm efficiency and on whether the comparatively high levels of concentration which exist in Australian manufacturing industries can be justified on efficiency grounds. Of course, allocative efficiency is difficult to measure unambiguously. Numerous attempts have been made empirically to measure the level of industry operations at which economies of scale exist1. In this paper we investigate whether large firms in Australian manufacturing industries enjoy any significant advantages over their smaller rivals, in terms of several different performance ratios. The evidence does suggest the existence of some superiority by the four largest firms in an industry over their four closest rivals, although it is by no means as great as might have been expected, given the traditional argument supporting large firm size in Australia. This finding, following a comparison of actual concentration levels with what we call minimum feasible concentration

The Political Market for Government Assistance to Australian Manufacturing Industries*

This paper applies the emerging neoclassical economic theory of politics to the question of why some industries receive more government assistance than others. Various determinants of the incentives for interest groups to demand assistance and for governments to supply assistance are suggested on a priori grounds. An attempt is then mode to see how well these factors can explain (I) the differences between rates of assistance to Australia's munufacturing industries at various points in time between 1968–49 and 1977–78. and (2) the different changes in those rates during the mid‐1970s. The evidence generally supports the theory, and prompts some suggestions as to how to reduce existing government distortions.

Excess Demand and ExDectations Influences on Price Changes in Australian Manufacturing Industry*

Data from the quarterly ‘Survey of Industrial Trends in Australia’ have been used to evaluate whether various excess demad and expectations influences have significantly effected reported price changes in Australian manufacturing industry. For the manufacturing sector, as a whole. both expected and unexpected changes in average unit costs have been important, but no explicit excess demand influence has been additionally significant at the I per cent level. For a majority of the indrutry categories tested, however, certain excess dgmand variables (involving. for example, finished goods inventories, unfilled orders. and industry operating rates) and various cost and inventory expectations variables have been significant.

The Production Structure of the Manufacturing Sector and Its Distribution Implications: The Case of Taiwan

Previous articleNext article No AccessThe Production Structure of the Manufacturing Sector and Its Distribution Implications: The Case of TaiwanYhi-Min HoYhi-Min Ho Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Economic Development and Cultural Change Volume 28, Number 2Jan., 1980 Article DOIhttps://doi.org/10.1086/451174 Views: 3Total views on this site Citations: 5Citations are reported from Crossref Copyright 1980 The University of ChicagoPDF download Crossref reports the following articles citing this article:Kwan Yeong Shin The Political Economy of Economic Growth in East Asia, (Jan 1998): 3–31.https://doi.org/10.1016/B978-012407440-8/50013-3Martin King Whyte The Social Roots of China's Economic Development, The China Quarterly 144 (Feb 2009): 999–1019.https://doi.org/10.1017/S0305741000004707Marco Orrù The institutional logic of small-firm economies in Italy and Taiwan, Studies In Comparative International Development 26, no.11 (Mar 1991): 3–28.https://doi.org/10.1007/BF02687183A.M.M. Masih Ces Production Function: Estimates of Elasticity of Substitution, Returns to Scale and Technical Progress in Australian Manufacturing Industries, Economic Analysis and Policy 14, no.11 (Mar 1984): 30–46.https://doi.org/10.1016/S0313-5926(84)50003-4 Richard E. Barrett , and Martin King Whyte Dependency Theory and Taiwan: Analysis of a Deviant Case, American Journal of Sociology 87, no.55 (Oct 2015): 1064–1089.https://doi.org/10.1086/227555

Concentration and the Level and Variability of Rates of Return in Australian Manufacturing Industries

Concentration and the Level and Variability of Rates of Return in Australian Manufacturing Industries

Industry Structure and Welfare Losses in Australian Manufacturing Industries

In a recent paper, Hefford and Round [13] presented estimates of welfare losses for 153 Australian manufacturing industries, over the period 1968-69 to 1973-74. These losses averaged $35.6 million per annum, about one tenth of one percent of average Gross Domestic Product at factor cost. Over 59 percent of the total loss came from ten industries, and nearly 80 percent of the total loss originated in 25 industries, suggesting that a large welfare gain could be achieved by the reduction of market power in just a few industries. The aim of this paper is to examine whether welfare losses are related to several aspects of industry structure, as two of the major Australian regulatory authorities generally have acted in accordance with some largely untested (in Australia) hypotheses about the relationship between certain structural variables, market power and economic welfare. For example, in considering applications by firms for permission to merge, and when considering the likely effects of restrictive practices on the extent of competition in a market, the Trade Practices Commission (Australia's antitrust authority) has stated clearly (see, for example, Walker [22, 161]) that higher levels of concentration

Structural Changes in Australian Manufacturing Industry*

The paper uses a neoclassical production function and historical data to test for structural stability in Australian manufacturing industry. The production function is an extended constant elasticity of substitution form in which factor substitution elasticity, returns to scale and market structure in output, capital and labour are testable hypotheses. Tests for structural changes in homogeneity and factor substitution elasticity relations are based on overall and individual tests of covariance analysis and also on a special version of the Swerling‐Kalman filtering systems as proposed by Cooley and Prescott. The empirical findings possess desirable statistical properties and indicate the existence of structural instability in the industry. The evidence also repudiates the assumptions of unitary factor substitution elasticity, constant returns to scale and market competitiveness in output and factors of production.

Profitability and Concentration in Australian Manufacturing Industries 1970‐71 to 1972‐73:A Further Examination*

In a recent issue of the Economic Record, D. K. Round found that, using I.A.C. data for 32 industries for the period 1970‐71 to 1972–1973, sales‐based measures of profitability were linked positively and significantly with concentration, but that funds‐based measures showed a negative relationship. In this paper, the I AC profitability ratios are adjusted from an historical cost to a current value basis. Regressions of the adjusted profitability ratios on concentration, over the period 1970‐71 to 1972‐73, conflict with Round's finding that the concentration coefficient using net profit/sales was significant, and a much weaker relationship is found with all of the regressions that used adjusted, as compared to unadjusted, I AC profitability ratios.

Profitability and Concentration in Australian Manufacturing Industries:A Reply

This brief note takes the adjusted profitability data series suggested by Leech and Grant, and shows that the weak and generally not strongly significant effect which concentration has on such profitability data (as shown by Leech and Grant) becomes even weaker and less significant when the model is more appropriately specified to include a capital‐output variable.

A Vintage Model of the Demand for Energy and Employment in Australian Manufacturing Industry

The ''putty-clay'' vintage model is used to describe the demand for variable factors in Australian manufacturing industries. While there is evidence that ex-post substitution between factors occurs, it does not invalidate the model. The model appears to be equally valid in energy-intensive and in labor-intensive industries. Labor-saving technical progress is universal and embodied and there is evidence that fuel-saving technical progress is embodied. The ex-ante production function generally yields well-defined output elasticities, but few price elasticities. The theoretical model's failure cannot be assigned to either inappropriateness or inadequate empirical application. The overall impression is that substitution effects are generally weak, although there is some evidence of substitution between solid and liquid fuels. The results obtained using the vintage model tend to confirm those using separate log-linear functions in that both models exhibit strong output effects and weak price effects. The simpler models may be adequate for forecasting, but the putty-clay model yields more insight into the nature of the productive process. 35 references.

Research and Product Innovation in Australian Manufacturing Industries

EMPIRICAL studies of research and development (R & D) activity in manufacturing typically proceed on the assumption (often implicit) that measures of R & D inputs are satisfactory proxies for the output which results from industrial research. For example, most investigations of the relationship between a firm's innovativeness and either its size or market power employ expenditure on R & D, or R & D employment as surrogates for innovativeness, despite the obvious point that they are measures of resources devoted to R & D activity in the firm and not of the results of that activity.' The explanation for this common procedure is straightforward. R & D inputs are easy to measure, and statistics of R & D employment, R & D professional employment and R & D expenditure are now widely collected. By contrast, the very concept of R & D output is both complex and elusive, and hence measurement poses many difficulties. The few existing studies of the relationship between R & D inputs and R & D output have used either patent statistics or the sales of new products as measures of R & D output. In a study of American patent data and R & D inputs across several industries in the early I960s, Mueller concluded that 'there appears to be a significant relationship between what goes into the inventive process and what comes out of it' [4, p. 36]. Several studies of technological change have been made of the U.S. pharmaceutical industry for which there exist data on the proportion of sales attributable to new products. Comanor [I] and Vernon and Gusen [7] employ these data in inquiries oriented more to an examination of the R & D :firm size relationship than to an explicit consideration of some aspect of the underlying research production function. Comanor and Scherer [2], however, compute the direct correlation coefficients between alternative measures of research activity in the U.S. pharmaceutical industry, including patent and new product sales as well as R & D inputs. Together, these studies have led to the

Price-Cost Margins in Australian Manufacturing Industries, 1971-72

Average price-cost margins are calculated for 34 Australian manufacturing industries. Multiple regression analysis is employed to determine a relationship between price-cost margins and several variables, including concentration, risk, plant size, industry growth, the nature of the industry's product, and the geographic markets served by the industry. A brief comparison is made between the results for Australia and those found in other countries. Given the data available and the multicollinearity of the variables, it is difficult to see how this study, and the overseas studies, can draw reliable conclusions on the determinants of price-cost margins.

The Cobb-Douglas Production Function Once Again: Its History, Its Testing, and Some New Empirical Values

Focuses on the Cobb-Douglas production function. History of the introduction of the function; Use of time-series analysis in formulating the function; Accuracy of the function. (Из Ebsco)

Profitability and Concentration in Australian Manufacturing Industries, 1968–69 to 1972–73*

Profitability and Concentration in Australian Manufacturing Industries, 1968–69 to 1972–73*

The Relation Between Changes in Costs and Changes in Product Prices in Australian Manufacturing Industries 1949–50 to 1967–68*

The Relation Between Changes in Costs and Changes in Product Prices in Australian Manufacturing Industries 1949–50 to 1967–68*