Open AccessProductivity Development in Selected Central European Countries Measured by the Sato Production Function
Author(s) -
Lenka Roubalová,
Lenka Viskotová
Publication year - 2018
Publication title -
národohospodářský obzor
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.178
H-Index - 8
eISSN - 1804-1663
pISSN - 1213-2446
DOI - 10.2478/revecp-2018-0018
Subject(s) - economics , production (economics) , productivity , marginal product , econometrics , production function , function (biology) , capital (architecture) , technological change , homogeneous , macroeconomics , mathematics , geography , archaeology , combinatorics , evolutionary biology , biology
In this paper, we investigate the relationship between economic output, labour and capital in the Visegrád Four, Austria and Germany. The main objective is to determine the type of technological progress in these countries over time, specifically in the period 1995-2015. The Sato production functions (a special case of the linearly homogeneous production function) for all the aforementioned countries are estimated using linear and nonlinear techniques. In addition to the original Sato production function, we propose modifying it in using a time variable, which allows us to analyse the development of productivity over time. Based on the NLS estimates of this modification, we create isoquant maps and calculate the value of the marginal rate of technical substitution of labour for capital to identify the nature of technological progress typical for each country. We also compare the properties of both the OLS and NLS estimates. The results are quite specific to individual countries, but there is some room for generalization.