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A TRANSCENDENTAL LOGARITHMIC COST FUNCTION: AN EMPIRICAL CASE
Author(s) -
Apostolakis Bobby
Publication year - 1981
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.1467-999x.1981.tb00675.x
Subject(s) - transcendental number , logarithm , economics , production (economics) , function (biology) , capital (architecture) , value (mathematics) , transcendental function , process (computing) , mathematical economics , microeconomics , production function , econometrics , mathematics , computer science , statistics , history , mathematical analysis , archaeology , evolutionary biology , biology , operating system
This is a first attempt to study the way imports interact with the primary factors in the Italian technology. We use a two‐output, three‐input transcendental cost function specification and reject the traditional functions as being inappropriate in explaining the production process. We conclude that value‐added is not produced exclusively by capital and labor and, also, that all inputs are substitutes for each other. The model justifies the incorporation of imports as a factor input.