The elasticity of substitution and labor-saving innovations in the Spanish regions

Antonio Cutanda ()

Estudios de Economia, 2022, vol. 49, issue 2 Year 2022, 123-144

Abstract: This paper performs a nonlinear estimation of a normalized CES production function within a system of equations with a panel of Spanish regions for the period 1964-2013. It obtains an elasticity of substitution below one and identifies different rates of factor-augmenting technical progress. The results support for labor-saving innovations hypothesis for the Spanish case. Nevertheless, they do not support a relationship between the elasticity of substitution and the initial regional capital per worker. The results do not change if labor is adjusted by human capital.

Keywords: Production function; CES; normalization; regional data. (search for similar items in EconPapers)
JEL-codes: C33 E23 O47 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:udc:esteco:v:49:y:2022:i:2:p:123-144

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