Cobb-Douglas Production Research Articles

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.

Analysis of technical efficiency’s lettuce farmers in Dalat City, Vietnam

The study aims to determine the technical efficiency and factors affecting the technical efficiency of lettuce farmers in Dalat City. The study’s primary data were collected by surveying structured questionnaires from 100 lettuce farmers in Dalat City. The Cobb-Douglas production, combined with the technical inefficiency according to the one-stage estimation method, was estimated by the program Frontier 4.1. The calculated results illustrate that the average technical efficiency of lettuce farmers is 0.76; with the usage level of available inputs and present techniques, Dalat lettuce production in the rainy season may increase by 24%. Besides, the study has also indicated that factors such as lettuce cultivated area, number of seedlings, and amount of pure potassium fertilizer positively influence lettuce yield. In contrast, the amount of pure nitrogen fertilizer negatively affected lettuce output. However, the education level and experience of household heads in lettuce cultivation positively affected technical efficiency. Therefore, to improve lettuce productivity and technical efficiency in Dalat City, the study suggests that farmers need to increase the amount of potassium fertilizer and reduce nitrogen fertilizer. In addition, state agencies recommend teaching lettuce farmers about the balanced and reasonable application of N, P, and K fertilizers through documents or training courses.

Location factors and agglomeration economies in the hotel industry: the case of Spain

PurposeThis research investigates the effect of accessibility to points of tourist interest (buffer) and direct and indirect spatial spillover effects of agglomeration economies on tourism industry revenues in Spain.Design/methodology/approachData were collected from the Bureau van Dijk's (BvD) Orbis global database. The data were analysed using a spatial econometric model and the Cobb–Douglas production function.FindingsThis study reveals that hotels located inside the buffer zone of points of tourist interest achieve better economic outcomes than hotels located outside the buffer. Furthermore, the results show that there is a direct and indirect spatial spillover effect in the hotel industry.Practical implicationsThe results provide valuable information for identifying areas where the agglomeration of hotels will produce a spillover effect on hotel revenue and the area of influence of location characteristics. This information is relevant for hotels already established in a destination or when seeking a location for a new hotel.Social implicationsThe results of this study can help city planners in influencing the distribution of hotels to fit desired patterns and improve an area's spatial beauty.Originality/valueThe paper provides insights into how investment, structural characteristics, reputation and location affect hotel revenue.

A Study of the Economic Contribution Rate of Agricultural Mechanization in Jiangxi Province from the Perspective of Cobb-Douglas’ Production Function

With the gradual transformation of traditional agriculture into modern agriculture, agricultural mechanization has played a very important role in the contribution rate of the whole people’s economy in Jiangxi Province. Because of the wide application of Cobb-Douglas (C-D) production function in western economics, many scholars have used this method in practice in recent years. By establishing the C-D production function model, the agricultural mechanization data of Jiangxi Province from 2005 to 2019 are analyzed, and the factors such as agricultural output value, agricultural mechanization input, agricultural material consumption, labor input and land input play a key role in the economic growth of agricultural mechanization development.

Based on the cobb-douglas function agricultural production planting and operation scale economics research

Based on the cobb-douglas function agricultural production planting and operation scale economics research

Evaluating parameters of econometric models with linear limitations and a rank deficient observation matrix

There considered the approach of the linear econometric dependences parameters estimating for the case of combining a set of special conditions arising in the simulation process. These conditions address the most important problems met in practice when implementing a series of classes of mathematical models, for the construction of which the matrix of explanatory variables can be used. In most cases the vectors that make up the matrix have a close correlation relationship; this leads to the need of performing calculations using a rank deficient matrix. There are also take place violations of the Gauss-Markov theorem condition. The list of above mentioned special conditions is augmented by the additional model parameters constraints. Cobb-Douglas's production function and the Solow model are known economic problems of this type. In this research the need to impose additional constraints on the model parameters is extended to a wider range of tasks. In general, the economic formulation of the problem with the specified features is presented.Known ways to solve these tasks are discussed. The authors’ approach proposed takes into account the whole spectrum of these features. This approach is based on the application of pseudorandom matrices and the use of singular matrix decomposition. The use of proposed mathematical tools makes it possible to improve the quality of estimating model parameters while using real economic processes data. The analytical definition is found for the parameter evaluating vector of a linear econometric model with all the above mentioned features. Analysis of the used definition provides determination of the conditions that the matrix must satisfy; this describes additional model parameters constraints. The term was also obtained to estimate the variance of a linear econometric model parameters vector.The results obtained can be used in machine learning systems in the implementation of problems of econometric dependencies or discriminant models.

Complementarity and Macroeconomic Uncertainty

Macroeconomic uncertainty—the conditional volatility of the unforecastable component of a future value of a time series—shows considerable variation in the data. A typical assumption in business cycle models is that production is Cobb-Douglas. Under that assumption, this paper shows there is usually little, if any, endogenous variation in output uncertainty, and first moment shocks have similar effects in all states of the economy. When the model departs from Cobb-Douglas production and assumes capital and labor are gross complements, first-moment shocks have state-dependent effects and can cause meaningful variation in uncertainty compared to the data. Estimating several variants of a nonlinear real business cycle model reveals the data strongly prefers a model with high complementarity between capital and labor inputs.

A Study on the Tax Structure and Economic Growth Relationship in Turkey within the Production Function Framework

Although the relationship between taxation and general economic activities and economic growth is frequently studied, the results, in general, differ depending on the country, the time period, the tax structure, whether it is based on a model and the estimation method used. This study examines the effects of the tax structure on labor productivity based on a Cobb-Douglas type production function under the assumption of Harrod-neutral technological progress by using unrestricted and restricted error correction models The estimates for the period 1980-2017 in the case of Turkey show that the long term elasticities of the labor productivity with respect to the tax structure indicators are significantly positive but mostly inelastic. Taxation firstly increases the labor productivity growth and decreases it in the short-run irrespective of the tax structure indicators. The results also show that there is no strong evidence on a causal relationship from the tax structure indicators to economic growth.

Impact of Gender Difference on Crop Productivity: Cross-sectional Data

The study examined impact of gender difference on Crop productivity in Decha woreda of south west Kafa zone, located at 23 Km from Bonga Town, and 473 km south west of Addis Ababa. The specific objectives were to assess the extent to which the agricultural production system is gender oriented; to examine access and control over productive resources; and to examine which households are disadvantageous in control over productive resources. Cross-sectional data collected from a total of 140 respondents were used in this study whereby 65 were female headed and 75 were male headed households. The data were analyzed by using Statistical Package for Social Science (SPSS). Descriptive statistics such as frequency, mean, percentage, pie chart, bar graph, t-test and chi-square were used to summarize and compare the information between the two groups. Moreover, Cobb-Douglas (CD) production function was used to estimate the productivity difference in agriculture between male and female headed households. Results of the study showed that male headed households (MHH) own more of productive resources such as land, livestock, labor and other agricultural inputs as compared to female headed households (FHH). Moreover, the estimate of CD production function shows that livestock, herbicide use, land size and male labor were statistically significant for MHH while livestock, land size, herbicides use and female labor were significant variables for FHH. However, if FHH had equal access to the inputs as MHH, gross value of the output would be higher by 23.58% for FHH. This may suggest that FHH would be more productive than MHH if they had equal access to inputs as MHH. Additionally, accessing of FHH inputs that increase the productivity of agriculture such as herbicides, livestock and male labor; increasing the productivity of land; and introducing technologies that reduce the time and energy of women especially for enset processing. Keywords: Gender, Crop, Productivity, Efficiency DOI: 10.7176/JBAH/9-24-01 Publication date: December 31st 2019

Comparative profitability of sole pineapple, pineapple-papaya and pineapple-banana-arum cultivation in Tangail District of Bangladesh

The focus of the study was to evaluate the comparative profitability of sole pineapple, pineapple-papaya and pineapple-banana-arum cultivation at Madhupur and Ghatail Upazilas of Tangail district in Bangladesh. Data from 90 randomly selected farmers, 30 each from sole pineapple, pineapple-papaya and pineapple-banana-arum categories, were collected through face-to-face interview using a set of pre-tested questionnaires. Profitability analysis was used to estimate the comparative profitability and Cobb-Douglas type production function technique was used to identify the factors influencing gross return. The major findings of the study revealed that sole pineapple, pineapple-papaya and pineapple-banana-arum cultivation in the study areas were profitable, among which, pineapple-papaya cultivation was relatively more profitable than the two other patterns. It was evident from Cobb-Douglas type production function that seed, human labour, fertilizer, insecticide, power tiller, and manure had a significant impact on gross return from sole pineapple, pineapple-papaya, pineapple-banana-arum production.
 J. Bangladesh Agril. Univ. 17(2): 236–243, June 2019

Economic analysis of Khirshapati (Mangifera indica L.) mango cultivation in selected areas of Bangladesh

The study was conducted to assess the profitability of Khirshapati variety mango cultivation and to analyze factors affecting productivity of this variety in four districts namely Khagrachori, Bandorban, Naogaon, and Satkhira of Bangladesh during February to March, 2018. Data were collected from 72 mango orchards using random sampling method. Descriptive statistics, profitability analysis and Cobb-Douglas type production function was used to analyze data. The per hectare gross cost, gross return and net return were Tk. 507817,Tk. 72,8419 and Tk. 22,0602 respectively for the 6-7 years of Khirshapati mango orchard. Net present value was Tk. 65,343 and benefit cost ratio was 1.16 which ensures that investment in mango cultivation is financially feasible. Mango cultivation was also found to be a profitable enterprise since internal rate of return was 20%.The functional analysis indicates that per hectare yield were significantly positively influenced by age of the orchard, number of tress and amount of fertilizer. The results also show that area and amount of manure had significant negative effects. So a proper initiative should be taken to disseminate this information among the mango growers to sustain the yield of Khirshapati mango in Bangladesh.
 Res. Agric., Livest. Fish.6(1): 35-43, April 2019

Urban Comprehensive Water Consumption: Nonlinear Control of Production Factor Input Based upon the C-D Function

Utilizing the urban water demand function and the Cobb-Douglas (C-D) production function, an economic control model for the multi-input-multi-output (MIMO) nonlinear system was designed and implemented to describe urban comprehensive water consumption, where the urban water demand function was expressed as the product of the number of water users and per capita comprehensive water consumption, and the urban water supply function was expressed as a C-D production function. The control variables included capital investment and labor input for the urban water supply. In contrast to the Solow model, Shell model and aggregate model with renewable labor resources, the proposed model eliminated value constraints on investment and labor input in the state equations and hence avoided the difficulty in applying these models to urban water supply institutions. Furthermore, the feedback linearization control design (FLCD) method was employed to accomplish stability of the system. In contrast to the optimal control method, the FLCD method possesses an explicit solution of the control law and does not require the solution of a two-point boundary value problem of an ordinary differential equation, making the method more convenient for application. Moreover, two different scenarios of urban water consumption, one for the growth period and the other for the decline period, were simulated to demonstrate the effectiveness of the proposed control scheme.

Resource use Efficiency of Tomato in South Gujarat

The present study explored the resource use efficiency in tomato production in South Gujarat. The study is based on a sample of 120 farmers cultivating tomato crops in 3 major districts of South Gujarat. The Cobb-Douglas (CD) production was employed for the estimation of resource use efficiency. Analysis indicated the existing variation of the production elasticity of resource inputs among the tomato crops. The study revealed that the human labour charge, fertilizer cost, and machinery charges were the important resource variables positively and significantly influencing the crop output. The MVP factor cost ratio was found more than unity in case of the area under tomato cultivation.

Stability analysis and technical efficiency of major cereal crops in Ethiopia: a stochastic frontier approach

This article is premeditated to perform econometric scrutiny on technical efficiency (TE) of private farm households on cereal crops of Ethiopia. The paper also envisioned to test the instability of cereal crop production/productivity in the country. To analyse the technical efficiency, the authors applied the Cobb-Douglas (C-D) production function on agricultural sample survey data from the Central Statistical Agency (CSA) from 1998/99 to 2013/14. To establish effective and efficient model parameters, we applied more than a few model diagnostic techniques. The estimation results foreseen that, the mean level of technical efficiency of barley, maize, sorghum, Teff, and wheat production in Ethiopia found to be 66.96%, 77.34%, 64.09%, 70.52% and 73.37%, respectively. Correspondingly, the result prophesied that the technical inefficiency is a noteworthy component of the composed error term of the stochastic specification. Age and education level of household, regions and production year found to differentiate farmers in attaining different levels of technical efficiency in major cereal crop production. Therefore, policy makers should give emphasis on these identified factors to improve the technical efficiency of cereal crop production across the country.

Rice farming and farmer income: a case study at Kota Utara Sub District, Gorontalo Province

This research purpose to analyze the effect of the input use in rice farming on the income of farmers and analyze the efficiency of input in the production of rice farming to know farmers income at Kota Utara Subdistrict. The data obtained and analyzed used Cobb-Douglas analysis production function and efficiency analysis using input (allocative efficiency). The results showed that the use of production inputs together affect to the rice farming of farmers income. The results of efficiency indicate that the use of each input such as land, labor, seeds, fertilizers Phonska, urea, spontaneous drugs, score score are inefficient in the use of production input. Therefore, it is necessary to be reduced to achieve efficient use of production inputs. Keywords: Rice Farming, Production Input, Production Efficiency

A Regional Water Optimal Allocation Model Based on the Cobb-Douglas Production Function under Multiple Uncertainties

To optimize the water distribution of three industries based on the water demand prediction under multiple uncertainties, a fuzzy credibility-constrained interval two-stage stochastic programming (FCITSP) model base on the Cobb-Douglas production (CD) function was developed. The CD-FCITSP model integrated fuzzy credibility-constrained programming (FCP), an interval two-stage stochastic programming (ITSP) method and CD function. The developed model could deal with uncertainties with interval, random, and fuzzy features, reflect tradeoffs between different water use sectors, and provide water managers in arid regions with sustainable and reasonable water-allocation schemes under different credibility scenarios of local policies. Moreover, the relationships between economic benefits and water consumption were taken into consideration via the Cobb-Douglas production function. The developed model was applied to support the optimal allocation of limited water resources in Minqin County, northwest China. The obtained solution demonstrated that the developed method could help local water managers to effectively allocate limited water under multiple uncertainties and different credibility scenarios. In addition, water use efficiency could be promoted and the emissions of major pollutants could be reduced. The developed method could be extended to water management practices in other arid regions.

REGULARITY AND STABILITY OF EQUILIBRIA IN AN OVERLAPPING GENERATIONS GROWTH MODEL

In an exogenous-growth economy with overlapping generations, the Cobb–Douglas production, any positive life-cycle productivity, and time-separable constant elasticity of substitution (CES) utility, we analyze local stability of a balanced growth equilibrium (BGE) with respect to changes in consumption endowments, which could be interpreted as a transfer policy. We show that generically, in the space of parameters, equilibria around a BGE are locally unique and are locally differentiable functions of endowments, with derivatives given by kernels. Furthermore, those equilibria are stable in the sense that the effects of temporary changes decay exponentially toward ±∞.

Estimation of Resource-Specific Technological Change in a Production Function

Technological change plays a critical role in economic growth. Prevailing approaches to estimation of total technological change are associated with total factor productivity (TFP) based on a Cobb-Douglas (CD) production function. To estimate resource-specific technological change, previous studies typically assume an alternative specific functional form other than a CD function such as a transcendental logarithmic (translog) or a Constant Elasticity of Substitution (CES) function. In this article, we argue that under certain conditions, a resource-specific technological change can be estimated from observed resource intensity/productivity data over time, irrespective of which functional form is adopted. We also illustrate that if the estimated technological change is applied to a CD production function, the estimated resource elasticities can differ considerably from that estimated by the prevailing TFP approach. In our case of a panel data for 40 regions 1995-2009, our approach shows that a CD function is plausible across regions compared to the TFP approach.

Climatic Change and Environmental Effects on Rice Productive Efficiency

This study is concerned with the productive efficiency among rice crops (Aus, Aman and Boro) and identifies the impact of climatic and environmental effects on rice production using a translog stochastic production frontier model in Bangladesh. The result shows that the translog production function fits the study¬¬¬¬ better than the Cobb-Douglas production and there is a comprehensible impact on input variables of rice productive efficiency. The &gamma -estimate associated with the variance of the technical inefficiency effect is found large and significant (90%). The mean technical efficiency of the three types of rice during the period 1980 to 2008 is found to be 78, 71 and 80%, respectively. The loss of technical efficiency from the optimum level has occurred, because of lack of proper combination of related input variables. Among the inputs rainfall and good seed are recorded to be the most significant factor in rice production. The square effect of Area is found statistically significant with a negative value at 1% level of significance. The interaction effect of Area and Seed has been statistically significant. It is also observed that the interaction effect among the inputs and environmental factors exist in rice production. The explanatory variables are found decreasing the level of inefficiency and the climatic factors played the essence rule in rice productive efficiency in Bangladesh.

Technical efficiency of informal manufacturing sector enterprises: Evidence from the informal metal industry of Zimbabwe

Using data collected from a sample of 442 informal enterprises operating at eight centres in three provinces of Zimbabwe, this study evaluates technical efficiency of selected informal sector metal manufacturing enterprises. An analysis of factors that influence such efficiency levels has been conducted by way of estimating a stochastic frontier (Cobb-Douglas) production function. The analysis finds that operations in the informal metal manufacturing industry are still highly labour intensive with 75% of gross value added coming from labour contribution. The mean technical efficiency of the informal firms has been found to be 0.72, implying that there is still scope for enterprises in the informal metal manufacturing industry to increase their production by 28% if they efficiently allocate available productive inputs using available technology. The main sources and determinants of the inefficiency were also analysed and identified as comprising location of the enterprise, age of entrepreneur, level of education, age of firm and experience of firm owner, which were found to have significant influences on (in)efficiency. The study recommends that public policy should create an environment conducive to aiding entrepreneurs to operate by way of relaxing regulatory requirements for formalising the business ventures of small firms and emerging entrepreneurs.