Supply Response and Investment in the Canadian Food Processing Industry

Ramon Lopez

American Journal of Agricultural Economics, 1985, vol. 67, issue 1, 40-48

Abstract: This paper reports on the estimation of a dynamic model of the food manufacturing industry in Canada. Its major objectives are to analyze the determinants of investments and the production structure of the industry. An important finding of the study is that the hypothesis of instantaneous capital adjustment to changing market conditions is statistically rejected. Capital stock adjustment to optimal levels takes approximately two and one-third years. Another result is that although the industry is responsive to price changes, a general pattern of inelastic factor demand and output supply prevails in the short run, intermediate run, and even in the long run.

Date: 1985
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:67:y:1985:i:1:p:40-48.

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