Do supervisory inputs matter in a capital-intensive industry? Some evidence from a Japanese car transplant

Murugappa Krishnan and Ashok Srinivasan
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Murugappa Krishnan: University of Minnesota and Visitor, WZB, Berlin, Postal: University of Minnesota and Visitor, WZB, Berlin
Ashok Srinivasan: Fuqua School of Business, Duke University, USA, Postal: Fuqua School of Business, Duke University, USA

Managerial and Decision Economics, 1997, vol. 18, issue 3, 235-245

Abstract: We estimate a translog production function based on data from a Japanese automobile plant in the Midwest where output is determined by capital and different supervisory time inputs. We fit a model which allows for heteroskedastic errors, where this heteroskedasticity is a function of various variables affecting perceived target severity. We find that while, as expected, capital inputs are important, each supervisory time input is also significant in this capital-intensive industry. Linear homogeneity in these inputs is rejected. We find evidence of asymmetry in substitution among different components of supervisory time. This asymmetry has implications for the design and allocation of supervisory tasks. © 1997 John Wiley & Sons, Ltd.

Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:18:y:1997:i:3:p:235-245

DOI: 10.1002/(SICI)1099-1468(199705)18:3<235::AID-MDE808>3.0.CO;2-7

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