UNU-MERIT Working Papers Series
Estimation of a production function with domestic and foreign capital stock
Thomas Ziesemer #2022-002We estimate a Cobb-Douglas production function distinguishing between a
domestic and a foreign capital stock built from data of imported
machinery and transport equipment for Brazil. The preferred regression
uses log levels estimated by GMM-HAC. Results are that the elasticity of
production of foreign capital is about 40% of that of domestic capital,
the function has constant returns to scale in capital and labour
variables, and human capital and technical change are also highly
productive.
JEL Classification: C22, C51, E23, F43, O54
Keywords: time-series, estimation, production function, open economy, Brazil
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