Cobb-Douglas Research Articles

An Extended Exploration on Marx's Thought of Production Function

The topics presented in this paper are all new attempts to some extent, and so far, although there is some kind of attempts to reinterpret Marx's economic theory by using the Cobb-Douglas production function, there are few systematic studies of Marxist economics from the point of view of the production function. This paper reveals clear evidence that Marx had the idea of the production function in Capital and emphasizes that there is no such formulation in Capital as the so-called Marxian value equation c+v+m = w , written in letters, but that the formula W =c+v+m , which appears for the first time in Volume III of Capital, belongs to the typical format of a linear production function. From this it can also be recognized that the vertical Leontief production function actually stems from the decomposition of the variable capital part of Marx's production function. In terms of research methodology, this paper, based on a multi-party series of research results obtained from the study of production functions from the special to the general, after clarifying that the basic characteristic of Marx's production function is a linear production function, it achieves generalization by expanding it into the form. of the CES production function, thus clarifying the intrinsic connection between Marx's linear production function and other forms of production functions. The significance of this paper lies mainly in the fact that by exploring and analyzing Marx's idea of the production thought, we can deepen our understanding of Marx's economic theory, especially by further expanding the model of economic growth derived from the reproduction schema, and be conducive to comparative analyses with the economic theories of other schools of thought.

<p>Determinants of the Manufacturing Sector in Ecuador</p>

The world economy increasingly requires industries with greater specialization that provide higher value-added products to meet the diverse needs of society. In this sense, the objective of this research is to determine the productive capacity of the manufacturing industry in Ecuador, taking into account its financial resources and available human talent. The study employs a Cobb-Douglas production function and incorporates economic freedom as a structural variable. Panel data analysis is conducted at the provincial level, covering the period from 2010 to 2020. The results demonstrate that economic factors exhibit expected behavior within this type of production function. However, the inclusion of economic freedom in the analysis yields peculiar results, which suggests political implications that need to be considered at the conclusion of the study.

Correlation between energy consumption and economic growth – based on the perspective of panel vector autoregressive analysis

ABSTRACT Efforts are underway to balance economic development and ecological preservation by transforming the energy structure. This study uses the Cobb-Douglas production function to examine the relationship between energy and economic growth. Through panel data and regression models, 32 countries are analyzed in terms of global energy consumption and economic development. Countries are further grouped based on energy intensity and economic level to explore dynamic relationships. Previous studies lacked understanding of this relationship under varying conditions, while this study proposes a novel approach. Results indicate a one-way relationship between renewable energy consumption and economic growth. Further analysis reveals that countries with higher energy intensity and economic level experience a negative impact on economic growth from increased renewable energy consumption. These research findings have implications for government decision-making.

Production risk analysis of semi-organic rice in Sleman Regency, Special Region of Yogyakarta, Indonesia

Abstract Organic farming is a combination of conventional agriculture developed with innovation and science, adopting the principles of health, ecology, justice, and protection of the environment. Semi-organic rice farming refers to the transition from conventional to organic rice farming. Semi-organic rice farming is riskier due to the soil’s unstable fertility. This research aimed to determine the production risk in semi-organic rice and analyze the factors affecting that risk. Since Sleman Regency, specifically Seyegan District, is home to a thriving organic rice, the study took place here. A total of 100 respondents were taken using proportional random sampling. The production risk of semi-organic rice was analyzed using the coefficient of variation. The factors influencing the production risk were examined using the Cobb-Douglas production function. The results revealed that semi-organic rice carried high production risk, with a coefficient of variation higher than 0.5. Land area and land status influenced the production risk of semi-organic rice. The wider the implementation of semi-organic rice farming, the greater the production risk. Semi-organic rice farming on own land possessed a smaller risk than non-owned land.

Energy-consumption, financial-development, and economic-growth: Evidence from the Asia-Pacific economies

ABSTRACT This study examines the tripartite linkages between energy consumption, financial development, and economic growth in Asia-Pacific region. Using the augmented Cobb-Douglas production function, the results reveal a positive relationship between energy consumption, financial and economic development in the long run. The results confirm that energy consumption and economic growth are co-dependent. Interestingly, financial development augments energy consumption in the region and implies that development of financial infrastructure enhances energy consumption. In the subsample analysis, we observe some significant differences for the advanced, emerging, and low-income samples also for different economic swings. The study offers several policy implications for policy makers of the region.

The Cobb-Douglas Production Function and the Old Bowley's Law

Bowley's law, also referred to as the law of the constant wage share, was a noteworthy empirical finding in economics, suggesting that a nation's wage share tended to remain stable over time, as observed through most of the 20th century. The wage share represents the proportion of a country's economic output that is distributed to employees as compensation for their labor, usually in the form of wages. The term ''Bowley's law'' was coined in 1964 by Paul Samuelson, the first American laureate of the Nobel memorial prize in economic sciences. He attributed this principle to Sir Arthur Bowley, an English economist, mathematician, and statistician. In this paper, we introduce a mathematical model derived from data for the American economy, originally employed by Cobb and Douglas in 1928 to validate the renowned Cobb-Douglas production function. We utilize symmetry methods, particularly those developed by Peter Olver, to elucidate the validity of Bowley's law within our model's framework. By employing these advanced mathematical techniques, our objective is to elucidate the factors contributing to the stability of the wage share over time. We demonstrate that the validity of both Bowley's law and the Cobb-Douglas production function arises from the robust growth of an economy, characterized by expansion in capital, labor, and production, which can be approximated by an exponential function. Through our analysis, we aim to offer valuable insights into the underlying mechanisms that support Bowley's law and its implications for comprehending income distribution patterns in economies.

Resource productivity and allocative efficiency in improved cassava (Manihot esculenta) -based mixed cropping system in Ebonyi State, Nigeria

Over 60% of the cassava-producing households in Nigeria have adopted the cultivation of improved cassava varieties resulting in increased cassava yields and output. Yet, the attainment of domestic production level that would cope with the domestic consumption and the needs for the export market can only be achieved if the technical efficiencies of smallholder farm resources are upgraded and the cassava farmers become more efficient in the allocation of these resources. This study examined the resource productivity and allocative efficiency in improved cassava-based mixed cropping system in Ebonyi State, Nigeria. A multistage sampling procedure was employed to select a total of 120 respondents (comprising 60 adopters and 60 non-adopters of improved cassava-based mixed cropping system) on whom structured questionnaires were administered during the 2022/2023 cropping season. Inferential statistics involving the Cobb-Douglas production function and descriptive statistics were used for data analysis. The regression results revealed that all the five resource inputs for the adopters and four inputs excluding agrochemicals for non-adopters of the improved cassava-based mixed cropping system positively contributed to output of the respondents in the area. The results further showed that most of the resource inputs were of higher productivities under the adopters than the non-adopters. The result of the deviation from unity of the ratio of the Marginal Value Product (MVP) to Marginal Factor Cost (MFC) revealed that the adopters were more efficient in the allocation of land, cassava stem cuttings and miscellaneous variable capital inputs than the non-adopters. Constraints to increased cassava production in the area include lack of finance, high cost of farm inputs, among others. Policy measures aimed at liberalization of agricultural credit schemes to enhance farmers’ access to essential farm inputs, introduction of labour-saving techniques to farmers among others were recommended towards increased production and profitable cassava value chain business in Nigeria

Exports, FDI Inflows, Renewable Energy and Economic Growth: An Empirical Evidence from Singapore

The present study captures the impact of exports; FDI inflows and renewable energy on economic growth of Singapore economy by covering time period 1989-2022 in the context of Cobb-Douglas production function. This study applies ARDL approach for obtaining empirical results. The estimated results will further be tested by taking most of the diagnostic tests to make check whether the results are robust or not. The findings of this study reveal that exports; FDI inflows and renewable energy have a positive and statistically significant impact on the economic growth. However, short run impact of renewable energy is witnessed as insignificant while exports and FDI inflows contribute significantly in boosting economic growth. Moreover, labor and capital also play a positive role in enhancing economic growth. Based on these findings; this study suggests that exports; FDI inflows, and renewable energy may be given more importance by expanding their size if domestic production in Singapore is required to be increased.

Comparative analysis of hub and spoke seaport performance in Nigeria: Case of Apapa Port and Tin Can Island Port

Purpose: The primary aim of this study is to evaluate and compare the operational performance of two major seaports in Lagos, Nigeria – Apapa Port and Tin Can Island Port – using specific port performance indicators. Methodology: The study employs the Cobb-Douglas production function and the Ordinary Least Squares (OLS) method to analyse data sourced from the Nigeria Ports Authority's operational bulletin records. The analysis was conducted using E-view software version 10.0. Results: The findings indicate that cargo throughput, used as the dependent variable, has a strong positive linear relationship with ship traffic, berth occupancy, turnaround time, and the number of employees. The R2 value is 85.89% for Apapa Port and 98.79% for Tin Can Island Port, suggesting that Tin Can Island Port is more productive. Theoretical Contribution: This study contributes to the field of maritime transport and logistics by providing empirical evidence on the efficiency and productivity of Nigerian seaports. It highlights the importance of modern infrastructure and effective port operations in enhancing seaport performance. Practical Implications: The study recommends that the Nigerian government should focus on reducing port congestion, improving road conditions leading to the ports, and streamlining port documentation processes. These measures are essential for enhancing the operational efficiency of Nigerian seaports.

Recent Applications and Developments of the Cobb–Douglas Function: From Productivity to Sustainability

Recent Applications and Developments of the Cobb–Douglas Function: From Productivity to Sustainability

Can fiscal expenditure for agriculture mitigate the impact of climate change on agricultural production?

The profound impact of climate change on agricultural production, and the government’s fiscal expenditure for agriculture, is considered a crucial means to address this challenge. This study utilizes panel data from all prefecture-level cities in Heilongjiang Province from 2000 to 2020. Drawing upon the Cobb–Douglas production function, an economic climate model is constructed to empirically analyze the impact of climate change on grain yield in Heilongjiang Province. Furthermore, the role of fiscal expenditure for agriculture in mitigating the effects of climate change on grain yield is explored. Feasible Generalized Least Squares (FGLS) estimation is employed to address issues of “heteroscedasticity,” “autocorrelation within groups,” and “cross-sectional contemporaneous correlation” present in the model. The results indicate that climate change has a positive impact on rice and corn yields, while exhibiting a negative impact on wheat yield. The influence of climate change on crop yield is both linear and nonlinear. Specifically, temperature demonstrates a linear relationship with rice and corn yields, whereas precipitation shows a significant inverted U-shaped relationship with rice and corn yields. The impact of climate change on grain production in Heilongjiang Province varies significantly across regions. Fiscal expenditure for agriculture has a significant positive effect on the yield of major grain crops in Heilongjiang Province. In addressing the impact of climate change on grain production, agricultural fiscal expenditure enhances the positive effect of precipitation on rice and corn yields, while diminishing the positive impact of temperature on corn yield.

The Impact of Changes in Rural Family Structure on Agricultural Productivity and Efficiency: Evidence from Rice Farmers in China

Over the past three decades, China has shifted from a relatively immobile society to one where rural migrant workers are dispersed throughout urban areas, resulting in significant changes in rural family structure. Previous studies have tended to approach migrant workers as homogeneous groups within families. In contrast, our attention turns to the diversity among individuals and the complex interactions within families. Based on a survey of rice farmers in five provinces of China, this study aims to explore the heterogeneous impact of changes in rural family structure on the single-factor (i.e., land, labor, and capital) productivity and technical efficiency (TE) of rice production. Methodologically, we calculated the productivity indicator through the Cobb–Douglas production function. Following this, a one-step stochastic frontier approach (SFA) was employed to assess the production frontier and estimate inefficiency. To address self-selection bias in family migration behavior, we applied the propensity score matching method (PSM). The results reveal that significant outcomes are observed only with certain types of changes in rural family structure. The production decisions of rural families are influenced by the migration regions of their family members. Compared to non-migrating families (NM), families with couples’ joint migration outside the province show higher single-factor productivity and TE. We used multiple approaches to examine the results and came to similar conclusions. Therefore, enhancing social security measures and employment opportunities for migrant workers, with specific attention to supporting migrant couples, can have a positive impact on sustainable urban and rural development, as well as food security.

Determinants of Production in the Bread and Cake Industry in Banyumas District

The industrial sector is a pertinent driving force for economic development in developing countries, including Indonesia. Therefore, the industrial sector more than other industries must be prepared to become a leading sector. One of the industrial sectors growing in the Banyumas district is the food industry, especially cakes and bread. This research aims to analyze the effect of capital, labor, and raw material on the production of the food items and identify the independent variables that influence the production the most. The population of this study is 108 bread and cake business units. The sampling technique used is Stratified Random Sampling based on the number of workers. The data analysis technique used is multiple linear regression which refers to the Cobb-Douglas production function using natural logarithms. The results show that capital, labor, and raw materials partially have a positive and significant effect on production; capital, labor, and raw materials simultaneously have a substantial impact on production; the most influential variable on production is the raw material. The research implies that the bakery industry in Banyumas Regency should use a combination of production factors such as capital, labor, and raw materials optimally to increase production. Furthermore, it is hoped that the Banyumas Regency Government and financial institutions can increase the ease of access to capital to support business development. To increase labor productivity, the government and companies can facilitate to improve their knowledge and skills. Keywords: capital, labor, raw materials, production

Evolutionary game analysis on collaborative logistics diffusion considering diminishing marginal utility under dynamic productivity

Reducing carbon emissions in the transportation sector is crucial for sustainable practices, with collaborative logistics diffusion playing a significant role in promoting energy-saving and emission-reduction strategies. This paper introduces an evolutionary game model to analyze collaboration between manufacturers and logistics service providers (LSPs), using the Hotelling quadratic curve model to measure the diminishing marginal utility of basic profits. Initially, a static strategy leads to a cyclic evolution without reaching the evolutionary stable strategy (ESS), reflecting competitive dynamics under static productivity conditions where neither party gains a lasting advantage, leading to periodic adjustments in strategies. The Cobb-Douglas function models a dynamic productivity strategy that regulates the extra benefits of collaborative logistics and penalties for 'free-riding.' This strategy demonstrates an inward spiral convergence towards the ESS, showing that adaptive mechanisms enable manufacturers and LSPs to align interests and achieve equilibrium. Enhanced benefits from collaborative logistics promote a stable and cooperative ecosystem, discouraging free-riding and enhancing cost efficiency. Moreover, increased investment by manufacturers not only strengthens their position but also fosters an environment conducive for LSP participation, expediting collaborative logistics diffusion and minimizing potential losses.

Analysis of Resource Use Efficiency and Profitability of maize seed production in the Rolpa district of Nepal

This study aimed to assess the profitability and resource use efficiency of maize seed production in the Rolpa district of Nepal. Primary data were collected from a sample of 67 maize-growing farmers involved in maize seed production, selected randomly from the sampling frame with a confidence level of 95% and a margin of error of 5%, using Raosoft. Additionally, secondary information was obtained through a review of relevant literature. Descriptive statistics and the Cobb-Douglas production function were employed for data analysis. The results indicated that maize seed production in the study area was profitable, as evidenced by a gross margin of 17,160.6 NRs./ha and a benefit-cost ratio of 1.12. The productivity level was estimated at 15.46 qtl/ha. Moreover, the return to scale of maize seed production was calculated to be 0.79, suggesting a decreasing return to scale. The analysis of allocative efficiency indices highlighted the need for optimizing resource allocation. Specifically, increasing costs on seed, chemical fertilizers, and management by 94.03%, 99.30%, and 60.25% respectively would lead to optimal resource allocation. Conversely, costs related to human labor, farmyard manure (FYM), and tillage should be reduced. This research contributes to a better understanding of the profitability and resource utilization in maize seed production in the Rolpa district of Nepal. The findings provide valuable insights for farmers and policymakers to make informed decisions regarding resource allocation and enhance the overall efficiency and sustainability of maize seed production in the region.

A Bayesian Time-Varying Coefficient Model for Cobb–Douglas Production Function

A Bayesian Time-Varying Coefficient Model for Cobb–Douglas Production Function

Economic and financial analysis in the pea production system (Pisum sativumL.) in Nariño, Colombia

The pea production system in the Department of Nariño, Colombia, constitutes an important pillar within the life strategies of Nariño families, representing a good portion of the high Andean landscape. However, despite its importance, there remains a notable lack of information in aspects such as direct and indirect costs, profitability, and other key economic variables, for the development of this productive system and for decision making, particularly in the Nariño context. current. Therefore, the purpose of this study is to carry out a detailed economic and financial analysis, focused on the producers participating in the AGROSAVIA Social Balance project, to facilitate a deep understanding of the dynamics of this productive system. To this end, 38 semi-structured interviews were carried out with producers adopting Agrosavia Obonuco Andina and Agrosavia San Isidro varieties between the years 2019 to 2022. Producers were identified through the snowball strategy and references from key territorial actors. The analysis involved calculations of economic and financial ratios, production costs and the application of an econometric model based on the Cobb-Douglas function, using ordinary least squares to evaluate the efficiency and inefficiency of the crop. The findings reveal an annual increase in production costs of 9.5 %, a financial profitability of 35 % according to the internal rate of return (IRR), and a technical efficiency of 1.67. Factors such as seed and labour exerted a predominant influence on productivity, while aspects such as production area and age showed inefficiencies, which is why more efficient management strategies for available physical resources, more active involvement of the family and management strategies and appropriation of knowledge and technologies with an intergenerational approach.

The impact of local government debt expansion on exports: A study based on Chinese enterprise-level data

This article establishes a multi-sector general equilibrium mathematical model, using Cobb-Douglas production and utility functions, analyzing the dynamic transmission mechanism within and between infrastructure sector, other non-trade sector and trade sector under the impact of local government debt. Besides, with data related to local government debt in China and data from Chinese industrial enterprises, it examines, from empirical perspective, the impact and transmission mechanisms of local government debt expansion on enterprise exports. The research findings indicate that, firstly, the expansion of local government debt has a significant negative impact on enterprise exports, with a stronger focus on the quantity of exports. Secondly, local government debt creates a crowding-out effect on export industries by promoting the expansion of non-trade sectors, leading to an impact on corporate exports. Finally, the financial constraint effect is an important transmission mechanism through which local government debt affects corporate exports. These conclusions have significant practical implications for risk management and control of local government debt, financial management and driving economic growth through exports.

Economies of scale in Saudi Arabia's refining sector: An application of modern econometric models

This paper aims to reveal how the refining industry's inputs in Saudi Arabia affect its output and to forecast refining industry dynamics. The variables used in this paper are the refined petroleum products representing the dependent variable, with natural gas liquids, crude oil, labor, and capital acting as explanatory variables covering the period 1990–2020. The long run cointegration of the variables was observed. An error correction model utilizing the Cobb–Douglas production function framework was performed. Furthermore, this study applied the vector autoregressive model (VAR) and its diagnosis tests, including forecast-error variance decomposition (FEVD) and impulse response functions (IRFs).The results indicate that natural gas liquids and crude oil have a significant influence on the refining industry's output. Although capital and labor are significant determinants of output, they do not contribute significantly to output creation in the refining industry. This might be related to some parts of the capital and human resources being directed toward supporting activities, such as administration, technical support, maintenance, transportation, logistics and assigning third-party contractors to perform the main duties related to the production process. Additionally, the petroleum refining industry requires substantial capital resources for construction and maintenance. Thus, the actual measurement of capital input's influence on output was observed in the long run. The results reveal that the refining industry's variation is influenced by both its own characteristics and that natural gas liquid, crude oil, capital, and labor factors have a significant impact on the accuracy of industry forecasts.This study concludes that Saudi Arabia's petroleum refining industry operates under decreasing returns to scale, while the shocks in the refining industry are influenced and caused by external factors.

Modelling economic development of an industrial metropolis

Current turbulence of external environment pushes the research towards exploring municipalities’ economic development. The purpose of the work is to devise a method for assessing the factors behind economic development of an industrial metropolis based on the construction of a production function. Theoretical propositions of macroeconomics and systems analysis constitute the methodological basis of the research. The main method is the construction of the Cobb–Douglas production function given autonomous Hicks-neutral technical change. The evidence is the data of the Federal State Statistics Service’s regional office of Chelyabinsk Region on the production output (volume of own production (works, service) shipped), cost of production assets, and payroll in the city of Chelyabinsk for 2014–2021, as well as price deflators. The model is formalised in the form of a computer program and is registered by the state, which reflects its practical value. The theoretical and methodological significance of the research consists in that for the first time in economic practice it demonstrates that individual elasticity coefficients can take negative values. The findings of the study can be used for forecasting the results of the interventions aimed at increasing the economic sustainability of an industrial metropolis.